Robinhood is an App-first online broker that does not charge commissions on trades and that has a very simple user interface

Robinhood logo
Country: USA
Year: 2015

  • More than 500,000 people have signed up for the Beta version of Robinhood. It shows great interest in having the ability to trade almost for free in the young generation
  • Google Ventures and other major VCs have invested in Robinhood, it might attest of a particularly good team and of a promising Business Model
  • The user experience is entirely focused on Millennials that prefer to have everything at their fingertips for a fraction of the cost

Concept

Robinhood is an App-first Online Broker that is commission-free for investments in individual stocks or ETFs

  • After providing some ID information (such as the Social Security Number), the user is required to link his bank account to Robinhood, which then allows him to trade stocks or ETFs for free
  • The App is easy to sign-up and easy to use. However, it does not support retirement accounts, the user is not able to transfer existing brokerage assets and can not trade options, OTC securities, warrants or mutual funds
  • Their Revenue Model is based only on two things: they collect interest on users choosing to trade on margin and on customers’ uninvested cash balances. Robinhood also plans to sell API access to other financial apps

Pricing & Conditions

  • Robinhood is commission free
  • Robinhood has no minimum deposit
  • They are building premium services (such as phone assisted trading for $10/trade)
  • Only available in the US

Differentiation

  • Only available on iPhone for now (with Android and web services planned)
  • Robinhood is particularly transparent on its revenue streams
  • The App is really user-friendly and aesthetic with minimal features so the user is not overwhelmed (users can only buy or sell at market price or make limit orders)

Illustration

Short Robinhood presentation’s video

Very short review of the different features of Robinhood’s App

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