Before Robinhood, anyone who wanted to invest in stocks would be charged between $5 to $10 a trade. They also needed to invest a minimum of $500 to open an account.
Vladimir Tenev and Baiju Bhatt (co-founders) had previous experience building these systems and saw the extraneous costs as little more than gatekeeping people out of investing. “We are not setting any account minimums, which we think unlocks a market of investors who couldn’t do this before,” said Bhatt to CNBC at launch. “We see Robinhood as unlocking the micro investor market.”
Robinhood was popular even before launch. In 2014, 340,000 people had signed up to the app’s waitlist, by March 2015 (a month before it launched), that figure had doubled to 700,000. Fans from Europe, Australia and South America filled Robinhood’s forums, pleading for the app to launch in their country.
Even though Robinhood advertises itself as a “free” app, it generates income through a process called payment for order flow. Essentially, when a person trades on the app, Robinhood sends that trade to a larger entity, which is able to leverage thousands of orders at once for a slight advantage. The larger entity then compensates Robinhood for the orders.
This process has received some criticism, especially after Robinhood halted trades of GameStop and BlackBerry during the ‘meme stock’ mania. Investors accused Robinhood of bowing to pressure from the market makers who execute the larger trades. Payment-for-order-flow is also controversial as it incentivises Robinhood to find the highest bidder, not the leader who will execute the trade fastest. Robinhood generates around 70 percent of its revenue from the practice.
The company generates the other 30 percent of its income from account interest and Robinhood Gold, which lets users trade on margin, make larger deposits and access professional reports from Morningstar.
Robinhood seems unconcerned with growing internationally, it cancelled plans for the UK and Australia in 2020. Several free-trade accounts have emerged in both countries, Robinhood would also struggle to generate as much revenue as payment-for-order-flow is banned in the UK.
Robinhood added cryptocurrency trading in 2018, which includes all of the major currencies like Bitcoin, Ethereum, Dogecoin and Litecoin.
In January 2021, Robinhood was at the centre of Reddit’s /r/WallStreetBets battle against hedge funds. Thousands of activist investors bought GameStop stock, forcing a “short squeeze” on the hedge funds. Robinhood suspended trading of GameStop stock for a few days, which caused a wave of backlash against the startup, as the move was seen as appeasing Wall Street.
With rising inflation and a significant decline in retail investing, Robinhood has had a tough two years. It has tried to shift more users to premium services, alongside more traditional investment services such as retirement options.
We’ve collected data and statistics on Robinhood. Read on below to find out more. Want to dive deeper into the stock trading app industry? Check out our finance app report.
Robinhood Key Statistics
- Robinhood generated $1.86 billion revenue in 2023, a 37% year-on-year increase
- The stock trading app reported an annual net loss of $540 million in 2023
- Robinhood had 10.8 million active users in 2022
- It had $89 billion assets under management at the end of the second quarter 2023
Want to learn more about the finance app industry? In our Finance App report, we cover financials, forecasts, usage, downloads, demographics and benchmarking data.
Finance App Report 2024
Robinhood Overview
| Title 1 | Title 2 |
|---|---|
| Launch date | 18 April 2013 |
| HQ | Menlo Park, California |
| People | Vladimir Tenev and Baiju Bhatt (co-CEO's) |
| Business type | Public (NASDAQ: HOOD) |
| Industry | Stockbroker and cryptocurrency |
Robinhood Revenue
Robinhood made $1.86 billion revenue in 2023, primarily through options trading, although it also saw increases in crypto trading during the year.
Robinhood revenue 2020 to 2024 ($mm)
Robinhood revenue 2019 to 2023 ($mm)
| Year | Revenue ($mm) |
|---|---|
| 2019 | 273 |
| 2020 | 951 |
| 2021 | 1813 |
| 2022 | 1358 |
| 2023 | 1865 |
Sources: Finance App Report, Company data
Robinhood Profit
Robinhood has posted an annual net loss for the past three years, although losses have decreased every year since 2021.
Robinhood net income/loss 2019 to 2023 ($mm)
| Year | Net income ($mm) |
|---|---|
| 2017 | -6.1 |
| 2018 | -57.5 |
| 2019 | -106.6 |
| 2020 | 7.4 |
| 2021 | -3686 |
| 2022 | -1028 |
| 2023 | -541 |
Sources: Finance App Report, Company data
Robinhood Assets Under Management
Robinhood had $89 billion in assets under management at the mid-point of 2023, a 39% increase on the previous year.
Robinhood assets under management 2019 to 2023 ($mm)
| Year | Assets under management ($bn) |
|---|---|
| 2019 | 35 |
| 2020 | 63 |
| 2021 | 98 |
| 2022 | 64 |
| 2023 | 89 |
Note: Value taken in Q2 of respective year. Source: Company data
Robinhood Users
Over 10 million people use Robinhood as their primary trading platform. Activity has dropped on the platform since 2021.
Robinhood users 2015 to 2023 (mm)
| Year | Users (mm) |
|---|---|
| 2015 | 0.5 |
| 2016 | 1 |
| 2017 | 2 |
| 2018 | 6 |
| 2019 | 10 |
| 2020 | 9.8 |
| 2021 | 22.5 |
| 2022 | 14 |
| 2023 | 10.8 |
| 2024 | 11.8 |
Sources: Company data, Forbes, Fortune
Robinhood Account Size vs Competitors
Robinhood has a much smaller average account size in comparison to more established brokerages.
Average account size of brokerage apps 2023 ($)
| App | Average account size ($) |
|---|---|
| Robinhood | 4,000 |
| Hargraves Lansdown | 108,000 |
| E-Trade | 127,000 |
| Charles Schwab | 234,000 |
Source: BrokerChooser
Robinhood Valuation
Robinhood’s valuation maxed at $20 billion in 2021, but has since taken a nosedive to $10.4 billion in 2023.
Robinhood valuation 2017 to 2023 ($bn)
| Year | Valuation ($bn) |
|---|---|
| 2017 | 1.3 |
| 2018 | 5.6 |
| 2019 | 7 |
| 2020 | 11.7 |
| 2021 | 20 |
| 2022 | 7.7 |
| 2023 | 10.4 |
Sources: TechCrunch, CNBC, FT, Business Insider
Robinhood vs Competitors: Users
Robinhood has the most app users across all stock trading apps at 10.8 million.
Stock trading users by app 2023 (mm)
Want to learn more? Check out our Finance App Report
Robinhood FAQ
How does Robinhood make money?
Robinhood makes most of its revenue through a process called payment-for-order-flow. Large entities, called market makers, execute hundreds of thousands of Robinhood trades at once and pay them for it.
What is Robinhood users average age?
Robinhood user average age is 31 (NYT), which is an increase of five years since the app launched in 2015 (WSJ)
What is Robinhood’s average revenue per customer?
Robinhood made an average of $172 for each customer
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