According to Bloomberg News, Robinhood, a stock and crypto trading platform, may conduct an initial public offering (IPO) in early 2021 and has begun to look for cooperative banks.
People familiar with the matter said that the company’s goal is to go public as soon as the first quarter of 2021. Robinhood was founded by two graduates of Stanford University, and the website claims that it “has the mission of democratizing finance for all.”
According to a previous report by “Beijing”, Robinhood said in September that the company raised US$460 million in Series G financing, raising its valuation to US$11.7 billion. Its investors include Sequoia, DST Global, Ribbit Capital, Andreessen Horowitz and Index Ventures and D1 Capital Partners.
Prior to the IPO, the platform’s trading volume will grow substantially, and retail transactions will be driven by home orders during the coronavirus pandemic.
Robinhood is also targeting a new group of millennials and Gen Z traders.
There are 13 million accounts on Robinhood’s platform, allowing trading options, gold and cryptocurrencies, stocks and funds.
Larry Tabb, head of market structure research at Bloomberg Information, said in a report that Robinhood’s targeting of millennials and its business model will increasingly attract the attention of other brokers.
“However, it is still difficult to compete with Robinhood,” Tabb said.
The company also encountered many difficulties during its development.
In the first half of this year, US consumer protection agencies received more than 400 complaints about Robinhood, about four times more than competitors such as Charles Schwab Corp. and Fidelity Investments.
These complaints were obtained by requesting public records from the Federal Trade Commission, reflecting the difficulty for novice investors to understand why they lost money on stock options or liquidated stocks to repay margin loans.
Last month, in a hacking frenzy, nearly 2,000 accounts on its platform were hacked.
Author Amy Liu
