Who’s ready to steal from the rich and give to the poor? Don’t all raise your hands at once.
As fun as that all sounds, we’re not actually talking about that Robinhood.
Instead, we’ll be discussing the up-and-coming commission-free stock tracking and investing app of the same name.
Founded on the belief that “the financial system should be built to work for everyone”, Robinhood (the app) hopes to educate (and ultimately capture as customers) audiences who have previously been ignored in the world of finance — aka the non-rich, non-Wall Street crowd.
Challenging the status quo and ensuring the same standards for every user, Robinhood hopes to democratize finance for the masses — with their app, the rich don’t get a better deal.
But who’s actually using this revolutionary app, and are they achieving their goals?
This article will take a closer look at Robinhood’s journey, as well as its setbacks. Most importantly, it will investigate the relative participation of both men and women that are active in the realm of finance apps to ask the question: Could this ground-breaking app be doing more to attract, educate, and uplift female users?
The Robinhood Journey
Like many other successful apps in recent years, Robinhood can trace its origins back to two college roommates with a great idea.
Baiju Bhatt and Vlad Tenev met at Standford in the early 2010s, where they both studied physics and mathematics. After graduating, they headed to NYC to live the dream — to build their own finance companies. Ultimately, both men ended up selling their trading software to hedge funds.
During their time on Wall Street, they were met with some hard truths: the big-wigs in trading — prominent Wall Street firms — paid “next-to-nothing to trade stocks, while most Americans were charged a commission for every single trade.”
With this insider information, the pair decided to head back to California in 2013 and develop their own financial app — one that would provide equal access to the financial markets to everyone.
By March 2015, the first version of Robinhood was launched. With 80% of their users falling into the “Millennial” category and an average user age of 26, they were starting out strong. By April 2017, they’d raised $110 million in funding and reached a valuation of $1.3 billion — an incredibly impressive number after only two years on the market.
Just a year later, in May 2018, they amassed a total of $539 million in venture capital funding and reached a valuation of $5.6 billion. This shocking number was increased yet again by May 2019 when the founders decided to pursue another $200 million in funding to reach $7-$10 billion in valuation.
By 2020, the Robinhood app had over 13 million users around the world. And while the financial market experienced a crash in 2020, Robinhood traders continue to use the app.
Having successfully finished their Series G funding round with another cool $280 million, it looked like Robinhood was on the up and up. That is until they meddled in the trading of certain stocks (i.e. GameStop).
Referred to as the 2021 "short squeeze" debacle, Robinhood faced widespread backlash for restricting the trading of certain stocks that were being targeted by an organized Reddit group. Robinhood dealt with a great deal of criticism concerning how they handled the situation from many people — from US House representative Rashida Tlaib to billionaire tech guru Elon Musk.
Having left an influx of 1-star reviews, angry Robinhood users are bent on achieving justice. On January 28th, a class-action lawsuit was filed in the Southern District of New York against Robinhood, alleging market manipulation.
In response, Robinhood announced that it would reallow limited buys of the stocks as of January 29th. However, the financial app is now facing a bit of a brand image problem.
From stock and EFT trading to cryptocurrency trading, who is currently using Robinhood to level the financial playing field? And how can they rebound from this very public setback?
Who is Actually Using Robinhood?
Using brand tracking software, we recently conducted a mobile-optimized brand survey on Robinhood’s brand performance in the US, where we found that 26% of the general population is aware of Robinhood.
This isn’t really a bad level of brand awareness, and when you break it down between genders, men come in at 28% and women at 23%.
Of the 28% of men that are aware of Robinhood, 54% of those respondents would consider using the app. However, just 2% of the males surveyed actually use Robinhood.
While brand usage levels are usually a good bit lower than consideration and preference levels, this is still pretty low and could stand to be improved.
Based on these results, we see that Robinhood has a long way to go in terms of increasing brand usage — and in keeping with the reported lower brand awareness levels, we can surmise that women report even lower subsequent consideration, preference, and usage levels.
As men have been historically more involved in the financial sphere — based on years of traditionally restrictive gender roles and norms — it makes sense that they still make up a larger part of the user base for Robinhood.
The Wall Street Journal reported that during 2020 “the number of women on Robinhood tripled (..) to reach its highest share of customers yet. Even so, they still account for a minority of users.”
We believe so, and will discuss ways they could improve usage with the female sector (and their damaged brand image) in the next section.
What Can Be Done to Encourage Female Participation in the Finance Industry?
If Robinhood wants to make a difference and bring more women into the industry as they’ve previously claimed, they’ll need to take actionable steps.
While it’s one thing to offer great introductions to finance in their user onboarding journey, it might not be enough to increase female app usage.
Let’s discuss some of the things they could do to help women feel more empowered and welcomed in the financial world.
1. Team Up With Tech-Focused Female Empowerment Organizations
Though it’s tempting to try and get the word out with massive brand awareness campaigns, it’s a much better strategy to work with more targeted audiences. Should Robinhood wish to expand its user base and welcome more women into the fold, they’ll need to be smart and strategic.
A great possibility would be to team up with tech-focused groups like Girls Who Code, Black Girls Code, or Girl Develop It. Perhaps Robinhood could provide funding, educational sessions, or internships to members of such organizations, empowering them to further their reach in the financial sphere.
Plus, publicly associating themselves with great organizations like those listed above would have a very positive impact on Robinhood’s brand image.
2. Offer Free Online Courses in Financial Services to Women
Another way that Robinhood could encourage and empower women to feel more at home in the financial world would be to offer free online courses.
Some women may not have the advantage or possibility to belong to an organization that promotes women in tech. Or they have no previous experience in the financial sector.
Either way, having a few stand-alone courses available to interested women around the world would be a great option. Though Robinhood’s blog already offers a great deal of fantastic information, it is always helpful to create more interactive forms for learning.
3. Set up Scholarships for Women Pursuing Finance Degrees
The final option we would suggest would be for Robinhood to set up a scholarship fund for women who want to pursue financial degrees but don’t have the resources to do it on their own.
There are women all over the world that could use financial and moral support to pursue their dreams of breaking into the financial industry but have been met with roadblock after roadblock.
By offering a few yearly scholarships, Robinhood could do its part to further the education and subsequent careers of women in tech and finance.
From the Microsoft Women’s Fellowship Program to the Booking.com Women in Technology Scholarships, companies from many different industries understand the importance of uplifting women in STEM. Robinhood would be wise to follow their lead.
There’s no denying it — Robinhood didn’t exactly handle the Reddit and GameStop fiasco as well as they could have. That being said, there’s a hefty amount of goodwill and trust they’ll need to earn back from the public.
If they want to take a proactive approach and steer the conversation in a different direction, now would be the perfect time to outline a plan to uplift women in finance.
However, the key to raising awareness and usage levels within the female population will rely heavily on Robinhood’s approach and outreach.
As a group that has been discouraged from taking up an interest in the financial sector for centuries — both subtly and outright — it’s up to brands like Robinhood to make the effort to connect with women.
We’ll be interested to see how Robinhood recovers from their recent incident, as well as which direction they’ll take their brand image going forward.