The developers of the Robinhood crowd sourced stock picking app have received $3 million in seed funding from a group led by Index Ventures to add commission-free trading to the app. Robinhood will begin offering free trades on its trading app on a first-come, first-served basis in January.
Robinhood was initially developed in April by Vladimir Tenev and Baiju Bhatt. The co-founders developed the app to try to fill a major hole in the mobile area, but they were eventually boxed out by Yahoo updating its mobile apps. The new startup ended up pulling the app from the store to redesign it around something big. Now, we’ve found out what the big redesign was all about!
Robinhood was approved by FINRA to become a broker-dealer back in October, and that set the stage for a quick unveiling of this project. The go ahead from FINRA allowed Robinhood to work toward its goal of becoming the first zero-commission stock brokerage.
Robinhood has a link here on their home page where users can sign up to be among the first granted access to the zero-commission trades. The company also has a bit of a unique social media and mailbox scheme where tweeting about Robinhood will bump up your place in line. Based on the early social media action, there is plenty of demand for the new app.
It’s hard to tell how this zero-commission stock trading app will fare in the long run, but it’s definitely something for investors to keep an eye on!
For the full press release click here.