Connect with us

Uncategorized

With a 2021 IPO in the cards, what do we know about Robinhood’s Q3 performance?

Published

on

After rising sharply in the second quarter of 2020, Robinhood’s income from routing its users’ orders to different parties for execution appears largely flat in the third quarter.

To be clear, Robinhood’s year-over-year growth is likely very impressive given the gains we’ve seen in the key revenue category for the heavily-funded unicorn this year. But, after torrid sequential growth from Q1 2020 to Q2 2020, Robinhood’s payment for order flow rose only modestly during Q3, according to a TechCrunch analysis of the company’s disclosures.

The data matters in the wake of news that Robinhood could go public as soon as the first quarter of 2021.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


Payment for order flow is a way that many brokerages make money, and by rule the data from the transactions is public. This provides a window into various fintech companies, both startup and incumbent that shows how quickly they are growing in this particular area. Robinhood has made the concept of payment for order flow better known thanks to its zero-fee model — order flow incomes are therefore key to its revenues — but it did not invent the practice.

Notably in the context of Robinhood’s slim Q3 order flow revenue growth, total equity trading volume was up in Q3, according to DriveWealth data. DriveWealth sells technology that powers equity trading for other companies.

So, the trading boom continues, which we read as bullish for Robinhood and similar players like Public (here’s the data from its securities provider, Apex. And, for fun, here’s E*Trade’s Q3 data.)

Still, a slowdown in growth of its payment for order flow revenue could decelerate Robinhood’s 2020 growth rate from simply bonkers to merely very good. And that could lower its potential IPO valuation from titanic to merely rich.

Let’s get into the numbers.

Robinhood’s Q3

Starting with some historical context, Robinhood’s payment for order flow revenues in preceding quarters are as follows:

  • Q1 2020: $90.9 million
  • Q2 2020: $177.9 million (This is around $6 million lower than we initially counted a few months back. In the spirit of fairness, I wanted to share the spreadsheet we used to tabulate both Q2 and Q3 Robinhood order flow revenues, but I am blocked from doing so by Verizon Media Group’s cybersecurity folks. Anyway, email in if you want to see the doc. Notably, The Block counts $180.1 million for Robinhood Q2 payment for order flow revenue. That number underscores our read that Robinhood order flow revenues were effectively flat in Q3 from Q2.)

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

Continue Reading
Comments

Uncategorized

Does Tor provide more benefit or harm? New paper says it depends

Published

on

Does Tor provide more benefit or harm? New paper says it depends

Enlarge (credit: Westend61 / Getty Images)

The Tor anonymity network has generated controversy almost constantly since its inception almost two decades ago. Supporters say it’s a vital service for protecting online privacy and circumventing censorship, particularly in countries with poor human rights records. Critics, meanwhile, argue that Tor shields criminals distributing child-abuse images, trafficking in illegal drugs, and engaging in other illicit activities.

Researchers on Monday unveiled new estimates that attempt to measure the potential harms and benefits of Tor. They found that, worldwide, almost 7 percent of Tor users connect to hidden services, which the researchers contend are disproportionately more likely to offer illicit services or content compared with normal Internet sites. Connections to hidden services were significantly higher in countries rated as more politically “free” relative to those that are “partially free” or “not free.”

Licit versus illicit

Specifically, the fraction of Tor users globally accessing hidden sites is 6.7, a relatively small proportion. Those users, however, aren’t evenly distributed geographically. In countries with regimes rated “not free” by this scoring from an organization called Freedom House, access to hidden services was just 4.8 percent. In “free” countries, the proportion jumped to 7.8 percent.

Read 8 remaining paragraphs | Comments

Continue Reading

Uncategorized

EV bus and truck maker The Lion Electric to take SPAC route to public markets

Published

on

Canadian electric truck and bus manufacturer The Lion Electric Company said Monday it plans to become a publicly traded company via a merger with special-purpose acquisition company Northern Genesis Acquisition Corp.

The combined company, which will be listed on the New York Stock Exchange, will have a valuation of $1.9 billion. The companies raised $200 million in private investment in public equity, or PIPE, and hold about $320 million in cash proceeds.

The deal is the latest example of an electric automaker opting to go public via a SPAc merger in an aim to access the level of capital needed to become a high-volume vehicle manufacturer. Arrival, Canoo, Fisker, Lordstown Motors and Nikola Corp., have all announced SPAC mergers in 2020.

In Lion’s case, the combined net cash will be used to fund the company’s growth, notably the planned construction of a U.S.-based factory and to further develop its advanced battery systems. Lion is evaluating more than 10 potential brownfield plant sites in nine states, including California, Illinois, Indiana, Michigan, New York, Ohio, Oregon, Pennsylvania, Washington and Wisconsin. The company told TechCrunch it plans to to pick a site and complete its industrialization plan by the end of the year. Production at this yet-to-be named factory is expected to start in the beginning of 2023.

Lion is already producing all-electric medium and heavy-duty urban trucks and buses at a 2,500-vehicle-per-year manufacturing facility. Some 300 vehicles are on the road today and the company has plans to to deliver 650 trucks and buses in 2021. It even landed a contract with Amazon to supply the e-commerce giant with 10 electric trucks for its ‘middle mile’ operations.

Completion of the proposed transaction is expected to occur in the first quarter of 2021. Lion is expected to be listed on the NYSE under the new ticker symbol “LEV.” Lion’s CEO and founder Marc Bedard will continue in his role. The combined company will have a board of directors consisting of nine directors, including Bedard, Pierre Larochelle from Power Sustainable as Chairman, and five other existing Lion board members, as well as Ian Robertson and Chris Jarratt, who are co-founders of Algonquin Power & Utilities Corp.

Continue Reading

Uncategorized

Daily Crunch: Facebook acquires Kustomer for $1B

Published

on

Facebook makes a billion-dollar acquisition, we learn more about Twitter’s Clubhouse-style feature and Moderna applies for emergency authorization for its COVID-19 vaccine. This is your Daily Crunch for November 30, 2020.

The big story: Facebook acquires Kustomer for $1B

Kustomer says it can give customer service teams better data and a more unified view of the people they’re interacting with. So with this acquisition, Facebook can improve its offerings for businesses that have a presence (in some cases, their primary digital presence) on the social network.

The terms of the deal were not disclosed, but TechCrunch has confirmed that the deal price was around $1 billion.

Facebook isn’t the only social media company making acquisitions to improve its customer service features. Earlier this month, Snap bought Voca.ai, a startup creating AI-based voice agents for call centers.

The tech giants

Alphabet’s DeepMind achieves historic new milestone in AI-based protein structure prediction — The advance in DeepMind’s AlphaFold capabilities could lead to a significant leap forward in areas like our understanding of disease, as well as future drug discovery and development.

Twitter’s Audio Spaces test includes transcriptions, speaker controls and reporting features — Earlier this month, Twitter announced it would soon begin testing its own Clubhouse rival, called Audio Spaces.

With an eye for what’s next, longtime operator and VC Josh Elman gets pulled into Apple — Elman said he will be focused on the company’s App Store and helping “customers discover the best apps for them.”

Startups, funding and venture capital

HungryPanda raises $70M for a food delivery app aimed at overseas Chinese consumers — HungryPanda makes a Mandarin-language app specifically targeting Chinese consumers outside of China.

Materialize scores $40M investment for SQL streaming database — CEO Arjun Narayan told us that every company needs to be a real-time company, and it will take a streaming database to make that happen.

Curio Wellness launches $30M fund to help women and minorities own a cannabis dispensary — The new fund, started by the Maryland-based medical cannabis company Curio Wellness, aims to help underserved entrepreneurs entering the cannabis market.

Advice and analysis from Extra Crunch

DoorDash aims to add $11B to its valuation during public offering — The delivery platform gave a range of $75 to $85 per share.

Strike first, strike hard, no mercy: How emerging managers can win — Investors at Fika Ventures argue that “Cobra Kai” offers valuable lessons for VC.

The road to smart city infrastructure starts with research — The right technology can upgrade any city, but we need to understand its impacts.

(Extra Crunch is our membership program, which aims to democratize information about startups. And until November 30 — that’s today! — you can get 25% off an annual membership.)

Everything else

Moderna claims 94% efficacy for COVID-19 vaccine, will ask FDA for emergency use authorization today — If granted the authorization, Moderna will be able to provide it to high-risk individuals such as front-line healthcare workers.

FCC Chairman Ajit Pai will step down to make way for the Biden administration — Pai’s tenure has been a controversial one.

Original Content podcast: Just don’t watch Netflix’s ‘Holidate’ with your parents — But if you avoid parental awkwardness, it’s a perfectly adequate holiday-themed romantic comedy.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

Continue Reading

Trending