Robinhood is Commission-Free but Still Raises $50 Million

Robinhood has announced that they have raised $50 million in funding that will be used to help them expand internationally.

Despite offering commission-less stock trading, Robinhood hasn’t had any problems attracting venture investments.

Launched in December of last year, Robinhood is a mobile based US stockbroker that offers trades with zero commissions. The app includes portfolio information and charts of stocks. In replace of charging commissions, Robinhood makes its money from interest fees on margins. In addition, several developers have related to Finance Magnates that they have discussions about creating third-party apps that would integrate with Robinhood accounts. Such a scenario could mean that a developer marketplace is also in the works that could provide additional revenues to the firm.

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Robinhood’s goal is that through its simplified stock trading offering, it will allow investors to save money on their investments as well as be conducive to new investors who may find other broker platforms too intimidating. So far, the firm appears to be meeting their goal’s with them announcing that they have raised $50 million in a funding round led by New Enterprise Associates (NEA) and including participation from existing investors Index Ventures, Ribbit Capital and Social Leverage. The funding raises the total investments in the firm to $66 million.

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Upon announcing the funding, Robinhood also stated that since its December launch, $500 million in transactions have been executed on the app based platform, with clients saving over $12 million in commissions. The firm added that 25% of customers are first time investors.

With the funding, Robinhood also announced the beginning of its international expansion plans as the company will be soon starting the regulatory process in Australia to open a brokerage in that country. Timing of the launch is expected to be provided later in the year.

In addition, Robinhood also stated that it was getting closer to the release of its Android trading app which is currently in beta. That product will open up its offering to a much larger audience, as the app is currently limited to iPhone and Apple Watch iOS devices.

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