History of Robinhood
Robinhood is a financial services company founded in 2013 by Vladimir Tenev and Baiju Bhatt. The company was created with the aim of democratizing finance by providing commission-free trading and simplifying the stock market for everyday people. Robinhood's easy-to-use mobile app quickly gained popularity, especially among younger, tech-savvy investors who were looking for an alternative to traditional brokerage firms. By offering a user-friendly interface and no-fee stock, options, and cryptocurrency trading, Robinhood became one of the fastest-growing fintech companies in the United States.
In 2020, during the height of the COVID-19 pandemic, Robinhood experienced a massive surge in users and trading volume, as many people began investing from home. The app's simplicity and low-cost model attracted millions of new customers, contributing to a broader wave of retail investing. However, the company also faced scrutiny for issues related to outages, customer service, and controversial practices like payment for order flow, where Robinhood would receive compensation from market makers for routing trades. Despite these challenges, Robinhood continued to expand its offerings, including introducing features like fractional shares and a cash management service.
Robinhood went public in July 2021, marking a significant milestone for the company. Despite the early buzz, the company's stock has faced volatility, with debates over its long-term business model and regulatory concerns. Nevertheless, Robinhood remains a key player in the retail investment space, driving changes in how everyday investors approach the financial markets and shaping the future of brokerage services.