CB Insights - Robinhood’s biz model

Hola,

Want to get smart quick on Robinhood? 

Earlier today, the company filed to go public.

Its filing showed that Robinhood has nearly 18M active users, as of March 31, 2021 (see This Week in Data, below). That’s a 106% increase since it reported 8.6M users in Q1’20, and a 670% increase since counting 2.3M in 2017.

As we showed in our analysis of 18 fast-growing financial services apps, Robinhood’s superpower has always been user acquisition, more specifically the use of tactics like waitlists and feature launches like crypto trading to fuel viral growth.
 

This year, Robinhood drew a lot of media attention (not always flattering), and regulatory scrutiny became a factor as well. But it has grown rapidly in customer asset terms nonetheless, with assets under custody growing from $19.2B in Q1’20 to $80.9B as of the end of Q1’21.

Other companies are chattering about how to keep up. More recently Robinhood has captured the attention of execs in financial services, who have been talking about the company as both a disruptor/competitor and as a client (like Twilio).

As the company prepares for its public debut, dig into our analysis of the business model on how Robinhood makes money here. 

Piece of the pie
 

From Facebook to Amazon to Google, big tech is expanding its product suite to encompass more content creation and monetization tools for creators. 

Check out our free 30-page report to see big tech’s moves in the creator economy and what’s ahead for the space. 

We’re all in this together

As consumers demand products that are more tailored to them, beauty incumbents as well as indie startups have a financial incentive to tap into underserved audiences. 

Learn about what inclusive beauty is and the markets defining the future of inclusive beauty, from male skincare to Gen Z, in this explainer. 

Read now, not later

So far in 2021, buy now, pay later (BNPL) companies have already set an annual funding record, raising over $2.1B across 20 deals.

Our market map highlights 50+ companies building out BNPL services across the world, from the US to Australia & New Zealand.

Get’cha head in the game

In case you missed it, events are back. 

And we’ve got 2 you won’t want to miss: 

1. Future of Fintech will be at The Glasshouse in NYC (October 5-6), with an online option.

2. Future of Health is back with a fully virtual event (December 8-9). 

You can join from anywhere, so be there or be square. 

Plus: apply to give a live demo of your tech solution at FoF before applications close on July 9. 

17.7M MAUs: Robinhood officially filed to go public, after filing confidentially in March. Per its S-1, the company counts 17.7M monthly active users (MAUs). It also saw significant growth during the pandemic, with Q1’21 revenues of $522M, up 309% year-over-year from $128M. So, how does Robinhood actually make money? We break it down here.

64%: Moveworks, whose conversational AI platform aims to resolve workplace issues, raised a $200M Series C round at a $2.1B valuation. We predicted Moveworks would pass the $1B valuation mark in our 2020 Future Unicorns report, made in collaboration with Fast Company. So far, we have a 64% hit rate (including exits). Read about Mosaic, our secret weapon for predicting tech company success, here.

5 acquisitions: Amazon acquired ART19, a podcast production service and advertising network. This is Amazon’s second purchase in the podcast space since December and fifth disclosed acquisition across industries this year. Whether in podcasting, the cloud, or retail, Amazon’s business advantage comes from aggregating suppliers and customers. We break down how Amazon has built and defended its moat here.

1.4M trips: Usage of shared e-bikes as a mode of transportation continues to rise. Per an NBC News analysis, across 11 cities, e-bikes accounted for 38% of all bike-share rides in May, amounting to 1.4M trips in total. That’s up from just 11% share, or 240,000 rides, one year prior, as shared e-bikes steadily replace conventional bicycles in bike-share programs. Check out our micromobility report for how bikes and scooters are shaking up urban transport worldwide.

$2T: JPMorgan Chase acquired ESG investing platform OpenInvest. Sustainable and value-based investing continues to heat up, with global assets under management in ESG funds totaling nearly $2T, according to Morningstar. OpenInvest, a Fintech 250 winner, will continue to operate under its own name within JPM’s client offerings. We visualize where top US banks are placing strategic bets on fintech companies here.

28%: China-based Shein has vaulted to the top of the US fast fashion market, controlling 28% share of the market, according to Earnest Research. Compare this to just 6 months ago, when H&M led with 23% share and Shein held 13%. During the pandemic, sales have surged for Shein, which operates exclusively online and uses gamification to drive customer loyalty. Take a look at how fast fashion has upended the traditional seasons model in this report.

9,555 lines: Sir Tim Berners-Lee, generally cited as the inventor of the World Wide Web, auctioned off the original source code for the WWW application as an NFT. The digital asset, which is titled “This Changed Everything” and includes 9,555 lines of code, sold for $5.4M.

Although Sivuqaq — the walrus who rose to fame for his appearances in the romantic comedy 50 First Dates — passed away in 2015, his presence lives on in a study published this week about his clapping behavior. 

Sivuqaq would sometimes clap his flippers thousands of times together in a day, a unique breeding display that has not yet been observed in the wild, per the study authors.

Have a great rest of the week.

Marcelo

P.S. We've extended the deadline to submit the initial application for the Fintech 250 to next Wednesday, July 7. Apply here before then.