Robinhood Markets Inc. (HOOD) is launching its IPO, which is the most anticipated one this year, on July 28.
Robinhood owns one of the most popular and in-demand exchange trading applications that enables trading stocks, as well as ETFs and options. Its core competitive edge includes zero trading commissions and no minimum account balance requirement.
Robinhood's business model is based on getting profit through various sources. First, there is Robinhood Gold membership, which gives clients access to investment tools and margin loans for $5 per month. Then, we have trading platform and market maker markups, meaning small amounts for routing orders to specific parties. Finally, there is stock and cash interest.
As S-1 application states, Robinhood currently has around 18M active clients, with an overall client asset amount of $80B, compared to 11.70M in 2020 and just 4.30M in 2019. In Q2, the company is expected to have 21.30M active users.
Robinhood's app got especially popular during the lockdown period: in the first four months of 2020 alone, more than 3M new users flocked to the platform; currently, this number reached 9.50M. The financial figures are heavily rising, with the Q1 2021 earnings amounting to $552M against $127M in Q1 2020, while the earnings per user are at $137, and 17% of the profit coming from cryptocurrency trading.
The company IPO value may amount up to $33B. Since its inception, Robinhood raised $5.60B in 24 investing rounds with 56 investors involved.
The fintech application market is growing rapidly, as the investments increased from $1.10B in 2009 to $44.10B in 2020, Pitchbook reports. Meanwhile, Business of Apps says that Robinhood is the third largest trading app, globally, in terms of profit and assets under management. The interest towards the product is increasing due to the intuitive interface, zero commission, and cryptocurrency trading.
Robinhood Markets Inc. IPO: Key Facts
● Exchange: NASDAQ (trading as HOOD)
● Starting Price: $38 to $42 per share
You can find Robinhood Markets Inc. Security Issue Memo on the SEC website.