The FinTech startup, which works to help millennials get into equities, crypto trading and other options, has benefited from the quarantine’s effects as people stay at home and have time to explore new finance options.
More market turmoil has also driven people’s interest. By providing commission-free services, Robinhood cajoled long-standing institutions like Charles Schwab, TD Ameritrade Holding and Fidelity Investments to do so, as well.
The company, launched in 2013, is now valued at $8.3 billion.
FinTech startups like Robinhood have been popular lately, attracting numerous new backers. The trend is due to growing interest in cashless, easy digital transactions that can be done without entering a bank building. That has been magnified by social distanced caused by the pandemic.
The pandemic hasn’t been all gold for FinTech startups, though; many have had to walk back plans to go public until 2021 due to the market chaos.
In February, Robinhood was ranked No. 1 on PYMNTS’s personal finance rankings, with its commission-free trading being popular and new money management features also giving it a boost.
Last year, the company announced it had over 10 million users, up from 1 million in 2016. Around the same time, Robinhood introduced a cash management service in the form of an investment upgrade that let users earn 1.8 percent interest on the money they didn’t have in stocks.
By partnering with a bank, users can access the service, which has debit cards and is backed by the Federal Deposit Insurance Corporation (FDIC).
The company initially wanted to become a bank all its own, although it was unable to make that happen, the same as every other FinTech startup that has tried to do so. By introducing the money management program, Robinhood was able to achieve a more modest version of its bank idea.