Robinhood Markets

Robinhood Markets, Inc. was founded on April 18, 2013, by Vladimir Tenev and Baiju Bhatt to provide commission-free trades of stocks and exchange-traded funds via a mobile app. The company aims to democratize finance for all and became a disruptive force in the brokerage industry by eliminating trading fees and simplifying the trading interface for retail investors.

In March 2015, Robinhood launched its mobile app, allowing users to trade stocks without paying commissions. This launch realized the founders' vision of making stock trading accessible and affordable for everyone, capturing the interest of young and tech-savvy investors. The app's user-friendly interface contributed to rapid user growth and set a new standard in the trading industry.

On May 10, 2018, Robinhood expanded its offerings to include cryptocurrency trading, allowing users to buy and sell Bitcoin and Ethereum with no commission fees. This move tapped into the growing interest in digital currencies and attracted a new segment of investors interested in cryptocurrencies, enhancing Robinhood's position in the fintech landscape. The platform eventually expanded to support other cryptocurrencies such as Litecoin and Bitcoin Cash.

In July 2019, Robinhood closed a $323 million Series E investment round led by DST Global, with participation from investors like Sequoia and Ribbit Capital, bringing its valuation to $7.6 billion. This funding was used to further develop Robinhood's engineering, customer support, and infrastructure, and to accelerate its growth and expansion efforts as a leading online brokerage.

On March 2, 2020, Robinhood experienced a major outage that left users unable to execute trades during a day when the Dow Jones Industrial Average surged 1,293 points. The outage lasted through the day, causing frustration among retail investors who missed out on profiting from market movements. Robinhood users were upset and some even considered legal actions due to the downtime during a major market opportunity.

On June 19, 2020, 20-year-old Robinhood user Alexander Kearns took his own life after mistakenly believing he had incurred over $700,000 in losses on the trading app. This tragic event highlighted the risks of complex financial products being accessible to inexperienced retail investors and prompted Robinhood to improve its user support and educational resources to prevent future misunderstandings and tragedies.

In January 2021, Robinhood became embroiled in a trading controversy involving GameStop and other 'meme stocks,' as it restricted users from buying certain stocks that were being targeted by retail investors on Reddit. This decision was met with widespread criticism from users, lawmakers, and regulators, who accused Robinhood of protecting institutional investors at the expense of retail traders, leading to congressional hearings and regulatory scrutiny.

On July 29, 2021, Robinhood Markets, Inc. held its initial public offering (IPO) on the Nasdaq Stock Market under the ticker symbol 'HOOD.' The company raised approximately $2 billion, with shares priced at $38 each. This marked a significant milestone for Robinhood as it transitioned from a private to a public company, despite a rocky start with the stock dipping on its first day of trading. The IPO was significant in the evolving story of fintech companies seeking to challenge financial industry norms.

In October 2021, Robinhood disclosed a data breach that affected approximately 7 million users. Hackers obtained email addresses and full names of a portion of users, while about 310 were affected more severely with additional personal information exposed. This breach raised serious concerns about cybersecurity and user data protection at Robinhood, prompting the company to enhance their security measures to prevent future incidents.

On August 2, 2022, Robinhood announced that it would lay off approximately 23% of its workforce, equivalent to about 780 employees, citing a deteriorating macroeconomic environment and a drop in trading activity. This was part of a restructuring process to streamline operations and achieve business objectives amid challenging economic conditions. The job cuts emphasize the volatility and rapid changes within the fintech industry and the need for companies like Robinhood to adapt rapidly to market demands.