Robinhood Raises $50 Million To Take Over The World Of Trading
Robinhood, a fintech startup that offers zero commission stock trading, is ready to go global. The company announced today that it has raised $50 million in a round led by New Enterprise Associates (NEA).
"It's an important milestone," Vladimir Tenev, co-founder of Robinhood, told Benzinga. "We're excited to continue building the business."
Three previous investors -- Index Ventures, Ribbit Capital and Social Leverage -- participated in the round as well. They were joined by newcomer Vaizra Investments.
"Since we're in the financial services industry, and we're in a heavily regulated business, the most important thing is assurance to our customer base, that this business has serious staying power," said Tenev. "Whenever customers have to deposit their money and give their personal information to a service, the stakes are much higher."
Tenev said that customers may wonder if the business is going to be around for the long haul, but it helps to have a large amount of capital backing the firm.
"In terms of actually using the capital, we've experienced awesome growth domestically," said Tenev. "We've been able to do that by leveraging technology and making what was, up until now, a pretty stodgy and antiquated manual industry much more efficient."
Fees By Default
Tenev thinks that customers are charged high fees "because that's what has been done for so many decades."
"You just haven't seen anyone willing to build a new business in this space," said Tenev. "You don't hear [about] new stockbrokerages being built very often. I think it's high time for a new entrant to enter that space with a dramatically better product."
Robinhood's technology had already been built for domestic customers. Now it can be made available to other traders around the world.
Robinhood used its funding announcement to reveal that it is expanding to Australia.
"A lot of the things that we've done domestically allow us to scale very easy internationally," Tenev explained. "It's really a big part of Robinhood's mission to make investing services universally accessible -- not just accessible to Americans but to people all around the world."
Americans typically pay a much smaller commission fee than traders in other nations. For example, Tenev said that Australians might pay as much as $65 per trade to buy a U.S. stock.
"We see a huge opportunity to improve the lives of people around the globe and give them access to awesome investment tools," he added. "We're starting with Australia. Today we're launching a special page on our website that will allow Australians to sign up, registering for early access to the service once it's available there. We have our sights on other countries around the globe as well."
Australian traders can sign up at robinhood.com/au.
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
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