What Is Robinhood — the IPO of the Year?!

Hello, this is Ryu from ONE X. Today I want to share my personal take on Robinhood — the investment app that has been dominating the conversation since last year. It seems that Robinhood, scheduled to IPO this year, has been wildly popular in the US since the COVID shock last year. Let me go into some detail — here we go!

Source: Robinhood HP

Who Is Robinhood's CEO?

The co-founders are Baiju Bhatt and Vlad Tenev. Both are still active as co-CEOs. They met at Stanford University, initially sold trading tools to hedge funds, but quickly pivoted to building an app that would let millennials easily access the stock market. They officially released the Robinhood app in 2015. Let's look at their mission:

Our Mission

Robinhood's mission is to democratize finance for all. We believe that everyone should have access to the financial markets, so we've built Robinhood from the ground up to make investing friendly, approachable, and understandable for newcomers and experts alike.

Their landing page says it even more simply:

We're on a mission to democratize finance for all.

That's exactly it. Robinhood built their service not just for those who already hold assets, but so that millennials and everyone else can build wealth. At first glance, you might think targeting wealthy clients would be more profitable in the short term — and that's certainly true. But Robinhood provided the entry point for a new generation to step into the world of investing. The Robin Hood legend is the story of a noble outlaw stealing from the rich to help the poor. They are trying to make that dream-like vision a reality. And their biggest strength is, without question, zero trading commissions. More on their business model shortly.

What Impact Have "Robinhooders" Had on the Stock Market?

Robinhood's total AUM: ~$30B
Institutional investors' total AUM: ~$trillions

The gap between Robinhooders and institutional investors remains enormous — at first glance, it might seem like individual investors have almost no direct influence. But for stocks with market caps under $10B, Robinhooders (those using Robinhood) can exercise a meaningful degree of influence. Millennial investors respond sharply to words like "innovation, sustainable, ESG, and diversity & inclusion." There is a culture of seeking social good. In Japan too, in recent years, growing numbers of millennials and Gen Z are interested in sustainability and SDGs — but in the US, these values are being reflected in the stock market through the Robinhood app.

The defining characteristics of Robinhooders can be broadly categorized as follows:

Investing in sustainable initiatives
Investing in innovations that transform society
Rapid learning via communication apps like Reddit and Discord

For characteristic 1, Tesla has become the symbolic example. Tesla's vision is "accelerating the world's transition to sustainable energy." They have continued making aggressive investments to achieve that vision. Tesla has historically been targeted by Wall Street short sellers, and the resulting short selling kept Tesla's stock price volatile and suppressed for years. But repeated aggressive buying by Robinhooders triggered short squeezes — a phenomenon where short sellers are forced to buy back at higher prices, driving the stock up rapidly. As a result, Tesla's market cap eventually exceeded the combined market cap of all global automakers, surpassed Facebook's, and CEO Elon Musk became the world's wealthiest person. Other clean energy stocks similarly saw rapid price appreciation with backing from Robinhooders. More recently, I've heard that institutional investors now check Robinhooders' trading activity daily before positioning themselves.

(For more on the Tesla-Robinhooder story, see the blog article linked above.)

For characteristic 2, investing in innovations that transform society — ARK Invest is perhaps a more apt example than Robinhooders alone, but Robinhooders are definitely checking ARK's trading history when making decisions. They're also keenly absorbing information from influencers active on Twitter and CNBC, like Jim Cramer, and incorporating it into their trades. By processing an enormous volume of information every day, they're improving the quality of their trading.

For characteristic 3, the exchange of information between individual investors via Reddit and Discord is staggering in both speed and volume. I actually received invitations from several US individual investors to join Reddit and Discord communities. Being the social-media generation, they share information freely and support each other to improve their investment outcomes. Recently, there are even reports of coordinated Robinhooder buying targeting small-cap stocks with heavy short interest, deliberately engineering short squeezes. For institutional investors holding short positions, this is nothing short of a nightmare. Up until now, institutions exploited information asymmetry to prey on retail investors — but now that anyone can access institutional-grade investment information, Robinhooders are beating institutions at their own game.

How Does Robinhood Make Money?

So what makes Robinhood unique? As mentioned above, it's the zero commission trading. This is an unheard-of pricing model for traditional online brokerages and legacy securities firms. How do they monetize it? Robinhood's primary monetization model is selling retail investors' trading data to institutional investors and others in exchange for payment information fees — essentially a data business. They also earn interest income from financial institutions and direct buying and selling of financial products, but I'll skip those details here. (If you accumulate money, you can develop all kinds of business lines.)

At first glance, this looks like a model where institutions extract information and profit at individual investors' expense, doesn't it? When I first heard the overview of this business model a couple of years ago, I thought: "This is probably a model that makes institutional investors rich." But the reality is that while institutions gain access to information and can sometimes position themselves favorably, individual investors have also become able to track institutional moves in real time — creating a more level playing field. I think this is partly because investment information has been democratized, and anyone who pays a small amount can now access short reports and other data. And as mentioned, the active exchange within individual investor communities has been building up fundamental and technical knowledge and know-how.

Are There Other Businesses Like Robinhood?

When Robinhood first launched, similar services proliferated, but Robinhood prevailed through superior user experience. Entrepreneurs can accelerate their startups with support from excellent venture capitalists. One of the most famous VCs is Sequoia Capital, which has historically invested in Apple, Google, Yahoo, Instagram, YouTube, PayPal, and many other representative high-tech growth companies. More recently, they've invested in China Alibaba's Ant Financial and the highly anticipated Stripe, among others. They are also Robinhood investors. Sequoia Capital's Andrew Reed commented:

"They transformed the financial markets into something accessible to ordinary people and revolutionized the securities industry."

Robinhood has also raised funds from Google Ventures, Andreessen Horowitz, and other prominent investors. Their user base is reportedly around 13 million. Is there a similar app in other countries? Yes — FUTU Holdings from China, sometimes called the Chinese Robinhood. This company has already IPO'd and has shown remarkable stock price growth. I downloaded and tried the app myself, and honestly, it's way more user-friendly than Japanese securities apps — which makes it easy to understand why it's so popular. I haven't personally used the Robinhood app, but I've done walkthroughs via various videos.

Back to the point: FUTU's FUTUBULL app has solid research features once you download it — I highly recommend trying it.

Did the COVID Shock Awaken Millennial Individual Investors?

In the US, Robinhooders emerged en masse and began exerting real influence on the stock market. In China, apps like FUTUBULL reportedly added over 5 million new individual investors. In Japan too, Rakuten Securities' user count surpassed 5 million, overtaking SMBC Securities and Daiwa Securities and closing in on the top two players, SBI Securities and Nomura Securities. Across countries, it's clear that COVID was the catalyst for a surge in new investors.

Source: Extracted from Rakuten Securities' aggregated results

Will Millennials Transform the Market?

A large influx of millennial investors has entered the market — where does this lead? Personally, I see it very positively. Our generation has the capacity to process enormous amounts of information through social media. Today, anyone can quickly and freely access high volumes of high-quality information. Armed with this volume and quality of information, we should be able to compete with institutional investors. There's a children's picture book called "Swimmy" — it comes to mind here. Even small individual investors, when they school together, can stand up to the big fish.

Former corporate strategist Shu Yamaguchi recently tweeted that we are moving toward an era where people can express their will through their purchasing choices. One person's choice may not have much impact, but when it's the collective choice of many millennials, everything changes. Boycott movements are among the things companies fear most, and community power makes them newly realizable. Boycotts against companies that disregard human rights, against companies slow to address LGBTQ rights, against companies failing on sustainability — these will only accelerate. And that momentum will extend beyond product choices to stock selection as well. Robinhooders are already saying NO to companies that don't demonstrate sustainable behavior, and I expect this trend to accelerate. In Japan too, this movement will come sooner or later. People who are still asking "What is ESG investing?" will find themselves in a painful position eventually.

Through Robinhood and similar services, the financial system is being democratized, and millennials are now capable of creating real Robin Hood moments. Let's build the momentum to create our own Robin Hood legend from Japan using the power of collective action.

This got a bit long, but I'll leave it here for today. This blog is purely my personal perspective and reference information. Please make all investment decisions at your own risk. But let's definitely build that sustainable momentum together.

This AI column is produced by the online assistant service "TIMEWELL."

Streamline Event Management with AI | TIMEWELL Base

Struggling with large-scale event operations?

TIMEWELL Base is an AI-powered event management platform.

Track Record

Adventure World: Managed Dream Day with 4,272 participants
TechGALA 2026: Centrally managed 110 side events

Key Features

Feature	Result
AI page generation	Event page completed in 30 seconds
Low-cost payments	4.8% fee (industry-leading low rate)
Community features	65% continue engaging after events

Feel free to reach out for a consultation on streamlining your event operations.

Book a free consultation →

What Is Robinhood — the IPO of the Year?!