Robinhood Markets, Inc., based in Menlo Park, California, is a financial services company offering commission-free trading of stocks, ETFs, options, cryptocurrencies, futures, and tokenized stocks via a user-friendly mobile app. Founded in 2013 by Vlad Tenev and Baiju Bhatt, it aims to democratize finance, targeting millennials with features like fractional shares, Robinhood Gold, crypto wallets, and wealth management. With 27.4 million users and $279 billion in assets by Q2 2025, it generates revenue from payment for order flow, interest, and subscriptions. Despite growth, Robinhood faced controversies like the 2021 GameStop trading halts, system outages, and regulatory fines. It expanded to the UK and EU, acquired firms like Bitstamp, and reported $989 million in Q2 2025 revenue. The company navigates challenges like security breaches and gamification criticism while innovating in fintech.
Long Version
Robinhood Markets, Inc. is an American financial services company headquartered in Menlo Park, California, known for its electronic trading platform that enables commission-free trading of stocks, exchange-traded funds (ETFs), options trading, index options, futures contracts, cryptocurrency trading, tokenized stocks, and outcomes on prediction markets. The company also provides cryptocurrency wallets, wealth management, credit cards, high-yield accounts, cash management, and banking services through partnerships with FDIC-insured institutions, alongside media offerings like Sherwood News and Sherwood Snacks. Robinhood’s mission to democratize finance targets retail investing, particularly among millennials, by offering an intuitive mobile app and fintech innovations that emphasize market access, execution quality, and market data without traditional brokerage fees. As of the second quarter of 2025, Robinhood reported 27.4 million funded customers, $279 billion in assets under custody, and approximately 2 billion option contracts traded annually. The firm is publicly traded on Nasdaq under the ticker symbol HOOD following its initial public offering (IPO) in 2021.
Founded in 2013 by Vlad Tenev and Baiju Bhatt, Robinhood has expanded from core stock trading to a broad suite of financial products, including fractional share trading, margin lending, securities lending, and AI-powered investment research. Its revenue model relies heavily on payment for order flow (PFOF), net interest income, subscription fees from Robinhood Gold, and transaction fees from cryptocurrency and other advanced instruments. The company has faced significant scrutiny over controversies such as the 2021 GameStop short squeeze, trading restrictions, system outages, security breaches, and regulatory violations, leading to SEC fines, FINRA penalties, Wells notices, class action lawsuits, and congressional hearings. Despite these challenges, Robinhood has pursued international expansion, including operations in the United Kingdom, the European Union, and a brokerage license in Lithuania, while acquiring entities like Bitstamp and Pluto Capital to bolster its capabilities in cryptocurrency and real-world assets.
History
Robinhood was established on April 18, 2013, by Vladimir Tenev (CEO and co-founder) and Baiju Bhatt (co-founder), both of whom had prior experience developing high-frequency trading platforms for institutional investors in New York City. Motivated by a desire to simplify investing and eliminate barriers like commission fees, they aimed to create a mobile app that would make financial markets accessible to everyday users, embodying the “democratize finance” ethos. The founders debuted a prototype at the LA Hacks hackathon in April 2014, followed by a beta launch later that year and a full public release in March 2015. In February 2018, Robinhood relocated its headquarters from Palo Alto to Menlo Park and introduced cryptocurrency trading via Robinhood Crypto. The company expanded into banking services in December 2019, offering FDIC-insured high-yield accounts and cash management features through partner banks.
During the pandemic-era trading surge in 2020, Robinhood experienced a 139% increase in trading volumes in the second quarter compared to the first, outpacing major competitors amid abundant monetary liquidity and a retail trading frenzy. This period highlighted the behavioral revolution in trading, with meme stocks and online communities driving activity, but also led to controversies including the 2021 short squeeze involving GameStop, where trading restrictions were imposed to manage clearinghouse requirements and short selling under Regulation SHO. Workforce adjustments followed, with layoffs of 9% in April 2022, 23% in August 2022, and 7% in June 2023. In 2024 and 2025, Robinhood focused on diversification, launching Sherwood News and rebranding its newsletter as Sherwood Snacks in April 2024, introducing wealth management in March 2025, securing a brokerage license in Lithuania in April 2025, and enabling tokenized stocks and ETFs in the European Union in June 2025. As of 2024, the company employed about 2,300 people.
Financing
Robinhood’s growth was fueled by multiple financing rounds. It raised $3 million in seed funding in December 2013, led by Index Ventures with participation from Andreessen Horowitz and others. This was followed by a $13 million Series A in September 2014, a $50 million Series B in May 2015, a $110 million Series C in April 2017 (valuing the company at $1.3 billion), a $363 million Series D in May 2018, a $323 million Series E in July 2019, a $280 million Series F in May 2020 (at an $8.3 billion valuation), and a $200 million Series G in August 2020. The company went public through an IPO on July 29, 2021, raising $2.1 billion at a $32 billion valuation. In November 2022, Robinhood repurchased a 7.6% stake seized in the FTX bankruptcy for $605 million.
Products and services
Robinhood’s core offering is an electronic trading platform accessible via mobile app and web, supporting stock trading, ETFs, options trading, cryptocurrency trading, futures contracts, index options, event contracts, prediction markets, and tokenized stocks. Key features include fractional share trading, Robinhood Gold (a premium subscription for advanced tools like margin lending and higher interest on uninvested cash), Robinhood Crypto and Robinhood Wallet for cryptocurrency wallets and trading, and the Robinhood Gold Card for credit card services. The platform provides in-app education, including crypto learn and earn programs, AI-powered investment research (via the Pluto Capital acquisition), and real-world assets tokenization. Banking services encompass high-yield accounts, cash management, and wealth management, with restrictions on mutual funds, bonds, preferred stocks, certain penny stocks, and last-minute options trades on expiration days. Sherwood News and Sherwood Snacks deliver financial news and insights.
Business model
Robinhood generates revenue primarily from payment for order flow (PFOF) and commissions on options (27% of Q2 2025 revenues), cryptocurrency (16%), equities (7%), and other products like futures and event contracts (5%). Net interest income from margin lending, securities lending, corporate and customer cash balances, and credit cards accounts for 36%, while subscription fees and advertising (including from Sherwood News) contribute 9%. This model supports commission-free trading, differentiating it from traditional brokerages, though it has drawn criticism for potential conflicts in execution quality and reliance on high-frequency trading partners. Metrics like net deposits, funded customers, assets under custody, and option contracts traded drive growth, with institutional investors and hedge funds influencing market dynamics.
Acquisitions
Robinhood has pursued strategic acquisitions to expand its offerings:
- MarketSnacks (March 2019): Financial newsletter.
- Binc (March 2021): Recruiting firm.
- Say Technologies (August 2021, $140 million): Shareholder engagement tools.
- Cove Markets (December 2021): Cryptocurrency trading platforms.
- X1 (June 2023, $95 million): Credit card issuance.
- Chartr (December 2023): Financial newsletter.
- Marex FCM (March 2024): Futures broker.
- Pluto Capital (July 2024): AI-powered investment research.
- TradePMR (November 2024, $300 million): Wealth management platform.
- WonderFi (May 2025, $180 million): Cryptocurrency trading.
- Bitstamp (June 2025, $200 million): Cryptocurrency exchange.
Controversies and legal issues
Robinhood has encountered numerous controversies. In 2019, FINRA fined it $1.25 million for best execution violations related to PFOF routing. In December 2020, the SEC imposed a $65 million penalty for misleading disclosures on PFOF, causing customer losses of $34.1 million. Security breaches include a 2019 password storage issue, a 2020 account compromise affecting 2,000 users, and a 2021 data breach exposing millions of emails and names. System outages during March 2020’s market volatility led to a $57 million FINRA fine and $13 million in restitution in 2021, plus a $10 million class action settlement in 2023.
The suicide of user Alexander E. Kearns in June 2020, amid confusion over options positions, prompted criticism of gamification of trading and risk management, resulting in enhanced education requirements. Regulatory probes include a $30 million fine in 2022 for anti-money laundering violations, a $7.5 million settlement in 2024 with Massachusetts over gamification, a May 2024 Wells notice from the SEC on crypto securities, and a $3.9 million California settlement in September 2024 for crypto withdrawal delays. The 2021 meme stocks saga involved allegations of market manipulation, political criticism, and financial stability risks, with review bombing and lawsuits following trading halts. In late September 2025, allegations surfaced of hiring discrimination against conservatives, prompting calls for investigation.
Financial performance
Robinhood’s financials have shown robust growth. In 2024, it reported $2.95 billion in revenue and $1.05 billion in net income, with total assets of $26.2 billion and equity of $7.97 billion. For Q2 2025 (ended June 30), total net revenues rose 45% year-over-year to $989 million, driven by net deposits of $13.8 billion and Robinhood Gold subscribers reaching 3.5 million. Diluted EPS increased 100% to $0.42. Q3 2025 earnings are scheduled for release on November 5, 2025. Stock price fluctuations reflect market sentiment, with earnings reports and press releases via investor relations providing ongoing updates.
International expansion
Robinhood launched in the United Kingdom in March 2024, with margin lending paused for new additions. Expansion to the European Union focused on cryptocurrency and tokenized stocks, supported by a Lithuanian brokerage license in April 2025 and EU tokenized offerings in June 2025. The Bitstamp acquisition enhanced global crypto capabilities.
Recent developments
In 2025, co-founder Baiju Bhatt transitioned to CEO of Aetherflux, a space-based solar power venture, while remaining associated with Robinhood’s legacy. The company continues to innovate amid debates on electronic blue sheets, unauthorized access risks, and cybersecurity vulnerabilities.
Hashtags For Social Media
#Robinhood #RobinhoodApp #StockTrading #FinTech #Investing #StockMarket #CommissionFreeTrading #CryptoTrading #MemeStocks #GameStop #OptionsTrading #FuturesTrading #TokenizedStocks #WealthManagement #FinancialFreedom #InvestingTips #StockInvesting #RobinhoodTrading #DayTrading #PersonalFinance #FinTechInnovation #RetailInvesting #MillennialInvesting #CryptoWallet #RobinhoodGold #FractionalShares #PaymentForOrderFlow #VladTenev #SherwoodNews #Brokerage
Related Questions, Words, Phrases
what is robinhood markets | how does robinhood work | is robinhood safe for investing | what services does robinhood offer | how to trade stocks on robinhood | robinhood commission-free trading explained | what are robinhood gold benefits | how does robinhood make money | robinhood crypto trading guide | who founded robinhood markets | robinhood app features | what happened in robinhood gamestop controversy | how to use robinhood for beginners | robinhood international expansion details | what is payment for order flow robinhood | robinhood financial performance 2025 | how secure is robinhood app | robinhood trading restrictions 2021 | what are robinhood’s banking services | how to buy cryptocurrency on robinhood | robinhood acquisitions list | why did robinhood face sec fines | what is robinhood wallet | robinhood stock trading platform review | how does robinhood gold card work | robinhood meme stocks impact | what are robinhood’s tokenized stocks | how to invest in etfs on robinhood | robinhood system outages history | what is sherwood news by robinhood | robinhood wealth management services | how does robinhood handle options trading | what are robinhood’s regulatory issues | robinhood vs traditional brokers | how to start trading futures on robinhood
