
By Louisa Xu, Eric Liaw
A year and a half ago, the world seemed to be coming to an end. Robinhood had just experienced two well-publicized engineering outages and offices around the world were shutting down due to the pandemic. This was when we at IVP decided to make the biggest single investment in the history of our firm in Robinhood, believing it had the potential to become a generation-defining financial services company with the potential to allow millions of people to take greater control over their financial futures.
Robinhood's mission is to democratize the financial system for everyone, regardless of their socioeconomic background. The team was and remains driven by a dedication to make a confusing financial system more open to all. Today, Robinhood publicly listed (Nasdaq:HOOD) as IVP's 125th IPO in the history of our firm.
Robinhood's product is best-in-class. The simple user interface, seamless onboarding, and ongoing education they provide to consumers have driven product-led growth from day one. The company keeps innovating as its growth continues to accelerate. Fractional shares allow users to invest with just $1 in stocks that can trade at hundreds of dollars per share. IPO Access gives users the opportunity to invest in a newly minted public company at the IPO price, an opportunity that was traditionally available only to institutions or high net worth individuals. Robinhood is eating its own proverbial dog food as 35% of the company's own IPO was distributed to retail investors, which is, as far as we can tell, one of, if not the, single largest IPO allocation ever. The company continues to invest in new product categories that allow users to grow their wealth over time, beyond trading equities and options.
The definition of who is considered an investor has also changed, thanks to the platform. Women now make up 30% of Robinhood's customer base, a user segment that has quadrupled in the last year, and over a third of Robinhood users are people of color. This is a historic company in more ways than one. Every product that Robinhood has introduced since 2013 has made it possible for all users, many first time investors, to access the financial markets.
Despite the macroeconomic turmoil over the last year and a half, growth on the platform has been staggering. The number of funded accounts on the platform grew from 7 million to 18 million in the year ending in March 2021. Over 80% of this growth came organically through word-of-mouth and referral as the brand gets stronger. Large online communities have collectively harnessed the Robinhood mission, sharing trading ideas and disrupting the very fabric of the traditional financial ecosystem.
While Robinhood's extraordinary growth and vision has changed the financial markets for the better, there have unquestionably been bumps in the road. We are heartened that the company's number one core value is Safety and know that they hold their obligations as a partner in the financial lives of their millions of customers with great care.
We believe the Robinhood story is just beginning. Younger investors are seeing the opportunity to harness their financial future, and today's IPO brings Robinhood another step closer to becoming the financial services platform for the next generation.
Louisa Xu and Eric Liaw are Partners at IVP, a later-stage venture capital firm.
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