Commission-free investing at 28M customers — now powered by prediction markets
HQ: Menlo Park, CA, United States | Founded: 2013 | Employees: Not disclosed in reviewed sources (public company, thousands) | Stage: Public (NASDAQ: HOOD); S&P 500 member since 22 September 2025; $4.5B revenue and $1.9B net income in 2025 | Website: https://robinhood.com
Robinhood was founded in 2013 by Vlad Tenev and Baiju Bhatt, who had built trading software for hedge funds and wanted to give ordinary investors the same access without commissions. The app launched in 2015, introduced commission-free equity trades, and by 2021 had become the default brokerage for a generation of younger investors. It priced its IPO at $38 per share on 28 July 2021, valuing the company at roughly $32B — up from about $12B a year earlier. Growth has been accompanied by controversy: the 2021 meme-stock trading restrictions, a 2021 FINRA fine, SEC and state settlements, and recurring criticism of gamified design. Robinhood settled a $45M SEC case over record-keeping and conduct issues and has repeatedly invested in compliance as it scales.
The company's modern era began with diversification. 2025 was the breakout year: revenue rose 52% to a record $4.5B, net income reached $1.9B and adjusted EBITDA $2.5B, driven by equities and options trading, a crypto cycle, net interest revenue and Gold subscriptions. Robinhood bought Bitstamp (~$200M, closed June 2025) for a global crypto exchange with licences, TradePMR (~$300M) for a custody and advisory platform serving registered investment advisers, and WonderFi (~$179M) for a Canadian crypto and fintech franchise reaching about a million customers. It launched tokenized equities for European users, expanded Robinhood Strategies (285,000+ funded customers and over $1.6B of assets by Q1 2026), rolled out Cortex AI features, and began custody of the Trump Accounts savings program. In September 2025 the stock joined the S&P 500, a watershed for the U.S. fintech sector.
Prediction markets became the defining product of 2026. Robinhood offers event contracts — economic data, elections, sports, market outcomes — through Robinhood Derivatives in partnership with Kalshi, and volumes exploded: roughly 13B event contracts traded in Q2 2026 alone, producing $156M of revenue, up 50% quarter over quarter. That made prediction markets Robinhood's largest single transaction revenue line for the quarter, ahead of crypto and equities, even though the regulatory ground underneath them is unsettled, with the CFTC and states fighting over jurisdiction and courts beginning to side with states on sports event contracts.
The second quarter of 2026 was the best in the company's history: record revenue of $1.31B (+32% YoY), diluted EPS of $0.62 (+48%), record net deposits of $22B, 28.4M funded customers, 4.8M Gold subscribers (up 39%), and continued momentum in Robinhood Banking ($3B+ of deposits from 240k+ customers) and Robinhood Ventures. In July 2026 it launched the Robinhood Chain mainnet, a permissionless Layer 2 on Arbitrum for tokenized assets, extending its reach into on-chain finance. The company's pitch is now that it is the primary financial app for a rising cohort of investors, and that each new product — crypto, advisory, banking, event contracts, tokenized assets — monetises the same installed base rather than requiring a new one.
Robinhood has completed the transformation that every consumer brokerage tries and most fail: from a single product with a controversial reputation to a multi-product financial platform whose growth no longer depends on a meme-stock day. Revenue rose 52% in 2025 to $4.5B with $1.9B of net income and $2.5B of adjusted EBITDA, and the second quarter of 2026 was the best in company history — $1.31B of revenue, EPS up 48%, a record $22B of net deposits, 28.4M funded customers and 4.8M Gold subscribers. Most striking is the mix: event contracts generated $156M of revenue in Q2, up 50% sequentially, which was more than either equities or crypto transaction revenue. A company once defined by zero-commission stock trading now earns its fastest-growing dollars from prediction markets.
That diversification was assembled quickly. Bitstamp gave it a global crypto exchange, TradePMR an $300M advisory platform, WonderFi a Canadian crypto franchise, and in July 2026 it launched Robinhood Chain, a permissionless Layer 2 built on Arbitrum for tokenized assets, while rolling out tokenized equities in Europe and taking custody of the Trump Accounts savings program. Gold has become the retention engine: 17% adoption overall, about 40% of new funded customers, at $5 a month. The S&P 500 addition in September 2025 ratified the story for institutional investors, and the stock's 2025 rally made HOOD one of the best-performing large-cap financials of the year.
The risk is that its most profitable new engine is legally contested. Prediction markets are the subject of a federal-state fight, with appeals courts siding with states that want to treat event contracts as gambling and the CFTC suing nine states to defend its jurisdiction — a fight that could shrink the market Robinhood now depends on. Trading revenue remains cyclical, crypto revenue is volatile, and Robinhood's history of outage and conduct fines means regulators keep it under close watch. The bull case is that it has become the default app for a generation of retail investors and can add products faster than incumbents can add customers; the bear case is that its growth is a function of retail risk appetite, and when that appetite falls — or when courts restrict the products that monetise it — both revenue and the multiple compress together.
Browse: Home | Blog | About | All Startups A-Z | View full profile on StartupWiki