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Fintech Monsters: Adyen and Robinhood Markets

22 May 2019 13:23, UTC
Aleksandre B
08-05-2019 15:42:02  |   Investments
Bitnewstoday continues to review the most successful and important companies in the digital economy. Today we are talking two companies of FinTech industry that have managed to change the rules of the game on the market.

Adyen. The payment system from the Netherlands

Adyen is a Suriname Creole word that stands for “again.” This name was proposed by one of the founders, the current CEO of Adyen Pieter van der DOES.

It all started back in 2006, when Pieter gathered the old team of the Bibit startup, which was recently sold to the Royal Bank of Scotland, and offered to start working again on his favourite and promising business — the development of the payment service. The previous company was sold for $100 mln and that has become quite a powerful argument in favour of the viability of online payments.

Arnout SCHUIJFF who was a systems architect of the previous startup, has now become a co-founder and CTO. In 12 years after Adyen IPO, he has become a billionaire just like the other founders.

During the IPO, Adyen capitalization reached $8.3 bln. This is an impressive figure, considering that the company's capitalization in 2015 was estimated at $2.3 bln. In 2011, for the first time since its foundation, Adyen became profitable, and since then, the company's revenues only increased. Investors were attracted by the aggressive promotion of the startup. They got more and more new customers including such giants as Facebook, Spotify, Netflix, Airbnb, Uber — they appreciated the technology of this payment system.

07-02-2019 17:16:17  |   Investments
Adyen, unlike many competitors, doesn’t interrupt the connection between the seller and the buyer when making payment transactions as the customer doesn’t leave the website. All steps pass in a reliable, safe and fast transaction way without consumer’s notice.

Due to high quality of the product, as well as the rich choice of means and methods of payment offered by the company, the owners of the oldest eBay marketplace decided to refuse to work with PayPal in favor of Adyen.

The current position of Adyen has not changed. It is still rapidly growing payment operator, which brings profit to its owners and investors, expands its geographical presence, attracts new partners, makes competitors lose value and give up market share. It seems that Adyen is a runway FinTech locomotive that started its way from Old Europe unlike traditional high-tech startups.

Robinhood Markets is the "unicorn" of mobile stock trading

In the stories about this company, the word “millennials” flashes pretty often: it is believed that thanks to the service created by Vladimir TENEV and Baiju BHATT, young people in the United States started paying attention to the world of stocks and options.

11-05-2018 00:00:00  |   News
The experience of the founders of Robinhood Markets has made it possible to create a product that suits many users. Many of those would never even think about trading on the stock exchange without the Robinhood Markets mobile app.

High-speed trading refers to the process when a computer program buys and sells assets based on user algorithms at the highest possible speed. Due to instant response and customizable algorithms, such programs are able to make a profit in situations where a person simply does not have time to take any action.

However, Robinhood Markets was not created so that robots could perform transactions with stocks, shares of exchange-traded funds, cryptocurrency or options. The main advantage of the service is maximum simplicity and an easy start. A highly elaborated user interface and the absence of commissions allow anyone to start trading immediately after installing an application for Android or iOS.

In 2013, when the company appeared in the major technology outlets with a story about the service, the customers lined up — there were 0.5 mln people on the waiting list.

Optimism about the future of Robinhood Markets was also shared by investors: several rounds of financing (the last one was quite recently, in February 2019) increased the value of the startup to $ 5.6 bln. They say that the company is preparing for an IPO this year. The simplicity and accessibility of the Robinhood Markets service is a good argument in its favor. However, there are some disadvantages.

The application has rather poor instruments for a speculator (investor): tools for viewing charts are the simplest (for example, the chart type “candles” that is elementary for most stock exchange terminals appeared quite recently). Some complain about the inconvenience of sorting, a limited number of assets and types securities available to the investor.

Since Robinhood Markets does not disclose the structure of its profits and does not talk about how user deposits on the balance sheet are used, there is room for all sorts of suspicions. Sometimes they say that company is involved in exchange traffic trading (payment for order flow), when a stream of user transactions is redirected to a third party that makes profits from the total number of transactions, often playing against them.

27-02-2019 14:38:54  |   Investments
Another common charge is the delay in updating the data in the terminal of the mobile and desktop applications. Users who compared the performance of professional programs from other brokers with Robinhood Markets, noticed the difference. Most likely, this is due to the fact that the company, providing the lowest possible service, is forced to take data on quotations from free and less high-speed sources. However, it’s up to users to estimate the advantages of the service and, apparently, still most of them make a choice in favor of “Rob-in-the-Hoods” of FinTech.

Image by Ciotechie