Trading app Robinhood hires Goldman Sachs to lead IPO

Stock trading app Robinhood Markets has picked Goldman Sachs to lead preparations for an initial public offering which could come next year and value it at more than $20 billion, people familiar with the matter said on Tuesday.

Robinhood was valued at $11.7 billion in its last private fundraising round in September. Such a jump in valuation would underscore the growth of its platform, which has helped popularize trading among millennials and fueled amateur stock picking during the COVID-19 pandemic lockdowns.

The sources, who requested anonymity to discuss the plans, said the IPO would come in 2021, cautioning that the exact timing and valuation will be subject to market conditions.

Robinhood and Goldman Sachs declined to comment.

Robinhood has raised just over $2 billion so far from private investors, according to PitchBook data. Its backers include venture capital investors such as Andreessen Horowitz, Sequoia and Ribbit Capital, as well as celebrities including rapper Snoop Dogg and actor Jared Leto.

The Menlo Park, Calif.-based company was founded in 2013 by Baiju Bhatt and Vladimir Tenev, aiming to democratize finance. Its platform allows users to make unlimited commission-free trades in stocks, exchange-traded funds, options and cryptocurrencies.

The app’s popularity is often cited by market pundits as a driver for the volatility seen in stock trading this year, from large-cap companies to the shares of companies in bankruptcy.

Robinhood’s IPO plans come amid a slew of red-hot listings by technology companies in 2020, including data warehouse company Snowflake, data analytics firm Palantir Technologies and home rental start-up Airbnb.

Appetite for new stocks has been fueled by a combination of low interest rates, the printing of money by the Federal Reserve, and an acceleration of tech trends due to the pandemic.