Robinhood S-1 Teardown
My review of Robinhood’s S-1 & IPO including revenue, customers, product segments, shareholders, and the company’s key metrics.
Company Overview
Robinhood, the fintech brokerage app, released their S-1 and will be going public with the ticker HOOD.
Robinhood raised $5.6B in the private markets from DST, Ribbit Capital, NEA, and others.
Founded in 2013, Robinhood is one of the fastest growing fintech companies with a ~$2B annualized revenue run-rate based on their Q1 2021 metrics.
Robinhood is targeting a $40B valuation at IPO which is 40x their 2020 annual revenue run-rate.
Key Metrics
Robinhood has 18M total funded accounts, of which 17.7 are monthly active users (MAU).
Robinhood is generating $959M in revenue in 2020, which is a 245% growth rate compared to 2019.
Robinhood has $81B of assets under custody including equities, options, cash, and cryptocurrencies.
Revenue
Robinhood did $959M in revenue for 2020, and $278M in revenue in 2019.
For 2021 they are doing a forward looking revenue run rate of ~$2B based on $522 million revenue for the first three months of 2021.
The biggest drivers of Robinhood’s revenue include:
80% of their revenue is generated through payment for order flow and other transaction fees.
12% of their revenue is generated through net interest margin on idle cash.
8% of their revenue is generated through Robinhood Gold (premium accounts)
While not the fastest growing segment, options make up a disproportionate % of transaction revenue of 38% of all transaction revenue.
Customers
Today Robinhood has 18M funded accounts, in 2020 they had 12.5M accounts, and in 2019 they had 5M accounts.
This is a 143% increase between the full year of 2019 to 2020.
Their average revenue per user (ARPU) is $137
Product Segments
Robinhood's core products include their trading platform, crypto trading, and cash management. With their retail brokerage and crypto trading making up the vast majority of all of the revenue for Robinhood.
The fastest growing product segments of Robinhood (by transaction revenue) are:
Crypto, which is growing 1,967%
Equities, which is growing 322%
Options, which is growing 231%
Robinhood has $81B of assets under custody including:
Equities - $65B
Options - $2B
Crypto - $11.5B
Cash - $7.6B
Margin - $5B
Robinhood Crypto
In Q1 2021, 9.5M Robinhood customers traded $88B of crypto on the platform.
Robinhood is holding ~$12B of crypto assets which is a 23x fold increase from 2020.
34% of all of their crypto revenue was attributable to Dogecoin.
Shareholders
The biggest shareholders of Robinhood (own more than 5% of the stock) include: DST Global, Index Ventures, New Enterprise Associates, and Ribbit Capital