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Robinhood – the fintech start-up that offers stock trades, options and free-of-charge cryptocurrency – is taking steps to become public, starting with the hiring of a CFO.
The co-founder of Robinhood, Baiju Bhatt, at the TechCrunch Disrupt conference on Thursday, confirmed the company's plans for an IPO and a CFO position. Both tasks should be handled with care. Bhatt stated that Robinhood's business model had subjected it to constant audits by the SEC and other financial regulators.
In the last two years, Robinhood has gone from a complex idea (no purchase fees to commercial values) to one of the most intriguing start-ups of fintech. Robinhood raised $ 110 million at a valuation of $ 1.3 billion in April 2017. It is now valued at $ 5.6 billion.
But Robinhood, like many tech startups planning to go public this day, continues to lose money. And it extends to areas such as stock options and cryptocurrencies that will lead to losses as Robinhood grows market share. "We do not intend to make much money for this in the foreseeable future," said Vlad Tenev, co-founder of Robinhood. Fortune in June.
The fact is that investors in IPOs are willing to tolerate losses as long as they are transformed quickly enough into growing profits. And they have learned to be wary of CEOs who talk cavalierly about losing money. Witness the fall of Groupon after its unfortunate growth failed to release profits, or Uber, who had to rethink its expensive global ambitions.
But since few FinTech start-ups have become companies that traditional Wall Street investors are comfortable placing in their assets, Robinhood's approach to the stock market will be closely monitored. In May, Robinhood's active user accounts reached 4 million, surpassing E * Trade, a trading platform long favored by daytraders.
The push of Robinhood in cryptocurrencies allowed him to recruit more users. The company not only helps small investors in a market that sometimes seems to oppose it, it looks like the most disruptive start-up since E * Trade made things move in the 1990s with commissions and quotations in mind. real time weak. It remains to be seen whether its expensive economic model will be well received by stock market investors.
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