Stanford roommates Vladimir Tenev and Baiju Bhatt set out to democratize access to financial markets – and one way to do exactly that is by eliminating prohibitive costs that scare away new investors.
So they created Robinhood, an iPhone and Apple Watch app that does away with commission fees associated with buying and selling stocks. Its mobile-first approach cuts out the cost of paying human traders and doesn’t require users to put down a minimum deposit.
“Imagine you’re a first-time investor in your early 20s. You have a few hundred dollars — maybe a thousand dollars — to put in the market. You want to learn how it works. Seven to 10 dollars (the cost of trading a stock in the U.S.) eats into that quite a bit,” Tenev told Business Insider late last year.
Since launching in December of 2014, Robinhood has racked up some pretty impressive numbers.
The company has generated over $500 million worth of transactions from hundreds of thousands of customers (a quarter of which are first-time investors) and today announced an impressive $50 million round of funding from NEA.
That’s the largest VC firm in the world, by the way.
Robinhood has now rasied $66 million in funding in under half a year, including investments from Snoop Dogg and Marc Andreessen.
The app is currently focused on trading U.S.-listed stocks and ETFs, but will soon kick off an international expansion starting in Australia (where trading a stock costs up to $65). Founders Tenev and Bhatt also want to double the size of their Palo Alto team of 30.