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Drawing on its growth over the years, Robinhood noted in its prospectus that many new traders choose to pitch tents with the trading platform for the first time.
Trailing the path set out by Coinbase Global Inc (NASDAQ: COIN), popular commission-free brokerage firm, Robinhood Markets Inc has filed for an Initial Public Offering (IPO) in the United States to list on the NASDAQ bourse. Per the filing, Robinhood seeks to raise as much as $100 million through the IPO, as the firm looks to bolster its offerings in a bid to continue to “democratize finance for all.”
As a brokerage firm, Robinhood has wide support for assets including Gold, stocks, and now robustly supports as many as 7 cryptocurrencies on its trading platform. In the prospectus filed with the US Securities and Exchange Commission (SEC), the firm said it has 18 million Net Cumulative Funded Accounts, 17.7 million Monthly Active Users (MAUs), and a total of $81 billion Assets Under Custody as of 31 March 2021.
Robinhood said it is paying attention to the use of technology to create equal opportunities for all of its customers, whether rich or poor. Drawing on its growth over the years, Robinhood noted in its prospectus that many new traders choose to pitch tents with the trading platform for the first time.
“We have built a foundation for future development. With a focused team and appropriate regulatory approvals, we created our own clearing platform. Our platform is entirely cloud-based and built on proprietary, API-driven services to meet the needs of a fast-growing, mobile-first, modern financial institution,” Robinhood revealed in the prospectus. “Our platform also enables a vertically integrated, end-to-end approach to product development, which helps us move faster from idea to creation, empowers us to better scale with the growth of our business, and affords us better unit economics that we can share with our customers. Our approach also provides increased internal visibility over clearing and settlement. We anticipate that our self-clearing platform will continue to position us well to further innovate for customers.”
In addition to the core numbers, the firm revealed that close to “50% of all new retail funded accounts opened in the United States from 2016 to 2021 were new accounts created on Robinhood, based on new account data from publicly reporting peer brokerages.” This ranks the US as one of the primary regions with enough retail customers for the firm.
Robinhood and the Nasdaq Push: the Place of Cryptocurrencies
While drawing on the potentials of the established assets the platform supports, digital currencies have taken up a vital position in its trading ecosystem. In general, crypto accounts for 17% of total revenue that comes from the platform, with the total digital assets held on behalf of its clients as of the end of the first quarter coming in at $11.6 billion.
The popularity of the Shiba-Inu-themed cryptocurrency, Dogecoin (DOGE) over the past year also impacted Robinhood and its Nasdaq listing push. The firm said Dogecoin trading and revenue makeup 34% of the total crypto portion and warns that its business may be affected if Dogecoin slows in momentum.
“If demand for transactions in dogecoin declines and is not replaced by new demand for other cryptocurrencies available for trading on our platform, our business, financial condition, and results of operations could be adversely affected,” Robinhood said
This showcases the power and popularity of digital assets amongst the trading brokerages that offer diversity. The firm will go public under the ticker symbol ‘HOOD’. The underwriters for the IPO include Goldman Sachs Group Inc (NYSE: GS), JPMorgan Chase & Co (NYSE: JPM), and Citigroup Inc (NYSE: C).