Robinhood retirin’
Robinhood, the retail trading app, now wants your retirement savings too — inviting a small number of existing users to open an IRA account on the platform on Tuesday.
Robinhood Retirement builds on their goal to “democratize finance”, a lofty mission for the company that has been somewhat derailed over the last 18 months.
Robinhood, founded in 2013, truly exploded during the meme-stock-mania of early 2021, offering an easy way for everyday folks to take — sometimes highly leveraged — trading positions. Since then, Robinhood has struggled to maintain its momentum — monthly active users have fallen 42% from their highs, to 12.3m in its latest quarter, and quarterly revenues have fallen by more than $200m since 2021. The company has adapted to slower volumes with cutbacks, slashing their workforce by 23%back in August.
Grow old together?
Introducing a retirement offering gives Robinhood a chance to get back to growth. With a majority of Gen-Z and Millennial users — who may not have started amassing large amounts of retirement savings — the Robinhood retirement product is a clever way of building a “stickier” product. The only problem is that it's expensive — the account offers a 1% contribution match for up to $6.5k of savings next year, meaning the brokerage could fork out $65 per user. Robinhood’s average annual revenue per-user? $63.
Retirement products may be a good idea long-term, but it's unlikely to get Robinhood's bottom line out of the red any time soon.
