Robinhood should focus its large cash injection on consolidating resources and fixing existing issues to better withstand the economic downturn
The mega-round is likely due to increased consumer interest as consumers look to capitalize on market volatility and lockdown measures reduce traditional spending. Robinhood's that allow users to trade commission-free and start with as little as $1 can be particularly attractive to consumers who are new to investing. And given the recent heightened market volatility, more people may be attracted to the allure of making fast money. increase in downloads and increased trading volume.
We believe Robinhood should exercise caution and focus the large cash injection into making its business model sustainable over the coming months. Leveraging this large raise to expand the company into a new office in Denver and a hiring spree may stretch the company too thin during the economic downturn.
In addition, we suspect it has yet to reach profitability since Vlad Tenev, the cofounder and co-CEO, previously to comment on whether the fintech is profitable. As a result, we think the funding should be used to develop and optimize products that will bring in revenue, such as Robinhood Gold, its premium account that starts at $5 a month and allows investors to trade with up to $1,000 of margin.
Establishing a sustainable business model would enable Robinhood to take full advantage of the opportunities brought about by the lockdown measures and market volatility, by earning a profit from consumers using its products. This would also improve its reputation as a sustainable business and justify its high valuation despite the economic downturn.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Magic Leap is turning to a major health care company for funding - Business InsiderMagic Leap is turning to a major health care company to save its future, potentially raising as much as $100 million
Read more »
'Call of Duty' publisher Activision funding coronavirus drug research - Business InsiderThe latest 'Call of Duty' has been a sales smash as many people are stuck indoors. Now, its publisher is funding coronavirus-fighting drugs.
Read more »
Investing strategy, global stock picks from fund manager David Dudding - Business InsiderA fund manager trouncing 90% of his rivals shared with us 5 trades he's making to stay ahead — including a big bet on Disney after it was crushed in the pandemic sell-off
Read more »
US companies eliminated a record 20.2 million jobs in April, ADP report says - Business Insider'Job losses for the month of April alone was more than double the total jobs lost during the Great Recession,' said Ahu Yildirmaz of ADP.
Read more »
How 4 businesses are meeting higher demands during COVID-19 - Business InsiderIndustries like gardening and security services are busier than ever during the pandemic. Here's how 4 small businesses are meeting higher demands. (via Inc)
Read more »
Nevertheless She Persisted: How A Female Fintech Founder Raised Her Seed RoundI am president of Ventureneer, which specializes in defining and eliminating problems that hold underrepresented entrepreneurs back, especially minorities and women. Our work provides clients with branded research, training and content opportunities that generate thought-leadership, visibility, sales, and brand loyalty. I am a WE NYC and digitalundivided mentor as well as an advisory board member of Million Dollar Women, Women Startup Lab, and Aleri Research..
Read more »