Zero-Commission stock brokerage startup Robinhood raises $13 million from Snoop Dogg and others

The traditional world of stock broking has been subject to a leap forward into the 21st century recently, with many innovations demonstrating a break from the norm and a departure from the grey-suited origins of the industry sector.

Last month, British electronic trading company IG Group which launched its own platform for stockbroking, controversially citing the entire industry as being “basic and opaque, with users only having access to antiquated technology when investing in the stock market.”

Just as IG Group places its emphasis on technology and modernity in order to make its foray into the previously staid world of stockbroking, a new entry into the market has emerged whose founding investors are as absolutely far removed from the briefcase-toting image of stockbroking as could be possibly imagined.

The new stock trading application, which arrives on the market under the brand Robinhood, has received investment from rap stars Snoop Dogg, Nas and fellow musician Jared Leto in a $13 million Series A venture capital backing from Howard Lindzon of Stocktwits, and Index Ventures.

The Robinhood application aims to simplify the process of trading stocks, and providing easier access to stock trading for retail investors, bypassing companies such as TD Ameritrade and Charles Schwabb which levy fees as high as $10 per transaction on trades.

Subsequent to the funding round, which follows the seed funding of $3 million in December last year led by Google Ventures and Andreessen Horowitz, the firm made a corporate statement regarding what it perceives as the high cost of executing transactions using the traditional methods of trading to the effect that “We believe there’s something inherently wrong with that, and we’re on a path to change it. Robinhood’s powerfully engineered technology and carefully designed mobile experience will allow everyday investors to trade with zero commissions.”

Currently, in the company’s pre-launch period, there is a waiting list which, according to Robinhood, consists of nearly half a million potential investors, most of which are in the 18 to 29 year old demographic, significantly younger than the majority of stock traders.

Robinhood’s founders Vlad Tenev and Baiju Bhatt intend to launch the service early next year when the grey suit and briefcase gives way to gold chains and smartphones.

Full details of the new stock brokerage can be viewed here.

Read Also: