Robinhood files confidential paperwork to go public, source says

Robinhood has filed confidential paperwork to pursue an initial public offering (IPO), a source familiar with the matter told CNBC on Tuesday.

Bloomberg first reported on the confidential filing.

The company has experienced a whirlwind start to the year as the pandemic helped draw new retail investors to its stock trading app. During a Reddit-fueled trading frenzy in January, Robinhood added 3 million users, JMP Securities estimated.

That boom got Robinhood in hot water when it decided to restrict trading on GameStop, the highly-shorted stock that Reddit traders chose to buy in mass numbers. Robinhood’s CEO Vlad Tenev was hauled before lawmakers along with other executives to testify on the trading frenzy and whether new regulations should be in order.

CNBC reported earlier this month that Robinhood had chosen the Nasdaq for its IPO, according to sources familiar with the matter. Goldman Sachs has been advising the company on the IPO.

Robinhood was founded in 2013 by Tenev and Baiju Bhatt, who were roommates at Stanford. They started in finance selling trading software to hedge funds, before starting Robinhood to develop ways for everyday retail investors to buy and sell stocks without paying commissions.

Robinhood gained popularity among younger crowds by making stock purchases as easy as finding an online date on Tinder. Customers quickly link their bank account information, search for a stock, and swipe up to buy.

Robinhood is one of several platforms that allows customers to buy fractional shares. Instead of buying a single Tesla stock for over $660, a customer could opt to invest $5, $10 or $100 and get a piece of share.

One of its most significant moves came in early 2018, when Robinhood opened the door to crypto. Users can purchase bitcoin, ethereum and numerous other digital currencies on the app the same way they buy stocks.

Robinhood counts New York-based D1 Partners, Sequoia, Kleiner Perkins and Google‘s venture capital arm, GV among its biggest venture capital investors.

This story is developing. Check back for updates.

-CNBC’s Ari Levy contributed to this report.

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WATCH: Here’s what Robinhood had to say to Congress about January’s volatile GameStop trades

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