Robinhood, the commission-free trading software, may soon be providing its clients with crypto lending and staking services in addition to its previously disclosed crypto wallet.
CFO Jason Warnick noted during the company's roadshow, which was webcast online yesterday ahead of its IPO on Thursday, that Robinhood is "making a lot of investments in areas we know our users want, such as wallets, lending, and staking. We believe there is a lot of promise ahead of us," he added, "and we look forward to delivering more items for customers."
Customers may now purchase and sell cryptocurrency using the Menlo Park-based trading software, but they cannot earn interest on their holdings or transfer cryptocurrency to external wallets.
Back in March, Robinhood stated that it will provide a cryptocurrency wallet “as soon as possible.” Yesterday, executives reiterated that commitment but did not offer a debut date.
A person familiar with Robinhood told earlier this month that the company's crypto wallet will interact with decentralized financial protocols. This might explain Warnick's mention of lending, a common function among DeFi protocols.
On Thursday, the eight-year-old firm will go public through an IPO. Under the ticker HOOD, shares are likely to trade at about $40.
Robinhood said last week that it intends to raise more than $2 billion through the IPO. The business expects to earn up to $574 billion in sales this quarter, up from $522 million in revenue in Q1.
Companies frequently organize roadshows to meet with deep-pocketed investors through confidential meetings to promote the IPO to potential investors.
Institutional investors frequently purchase this stock at a lower price and then sell it to investors when the IPO is launched.
On the other hand, Robinhood is allowing its consumers to purchase a large portion of its day-one IPO shares, placing them on equal footing with institutional investors.
As a result, it opted to live-stream its roadshows and have executives answer questions from any of its 18 million consumers.
The strategy is similar to that of Robinhood's crypto-native rival, Coinbase, which went public in April through a direct listing and hosted its roadshow on Reddit for the first time.
Because of the open nature of yesterday's roadshow, some queries from the online audience were far from serious. “What is your favorite planet?” inquired one prospective investor. “Pluto,” CEO Vlad Tenev said.
That is to consider, given that metaphor, crypto trading made about 17% of Robinhood's income in the first quarter of this year, while Dogecoin traders accounted for 34% of crypto revenues (or around 6% of overall revenue).