Robinhood rockets to a $5.6B valuation with a massive new funding round
techcrunch.com
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A legal gambling app is definitely hugely valuable.
I truly mean to say this in the most positive angle possible. I think they are providing a valuable service and a great app, but it is a very nice business as well due to the above.
Kudos to the team.
Besides, they have day-trading limits built into the app. It’s really just a mobile-first brokerage with extremely low net fees. And I’m grateful for it.
Anecdotally, it definitely feels like it has broadened the base of the retail investor audience (which I think is a great thing) and if you have seen the options and crypto currency UIs it strikes similarities with fantasy football and makes those objects shinier.
UX. Try out a few other brokerage experiences, and then try Robinhood, and you’ll see that the market was ripe for the taking for a team with design sensibilities.
Etrade made 614 million in profit in 2017. 19% of revenue was from order commissions, or roughly 449 million. So Etrade could eliminate commissions and still remain profitable. https://en.wikipedia.org/wiki/E-Trade
However, IB is decidedly not meant for the young, millennial, small amount of investment principal, getting started with investing/trading segment that Robinhood has carved out for itself.
So Robinhood's angle isn't just mobile first, it's mobile first for the segment of the population that expects such a product experience, who are going to grow their portfolios and trading activity in the coming decades.
Their advantage is an ineffable quality.
The closest I can come to describing that feeling of using the service is it's like someone in your family made it for you.
This may sound strange, but there's a lot of love there. That level of attention to detail and quality is rare and apple-like.