Robinhood wins approval to join IPO underwriting ranks

According to a statement shared by Robinhood chief executive Vlad Tenev on X on Tuesday, Robinhood Securities is now approved to serve as an underwriter, allowing the company to move beyond distributing IPO shares and into the group of firms that help bring companies public.

Tenev did not specify which regulator granted the approval. In the U.S., underwriting activities typically fall under oversight from the Securities and Exchange Commission and the Financial Industry Regulatory Authority.

Describing the development as the next stage of Robinhood’s IPO strategy, Tenev said the conversation around retail participation in public offerings has changed considerably since the company launched IPO Access in 2021. 

The approval adds another business line to Robinhood’s expanding financial services operation and comes less than a week after the company completed its $180 million acquisition of WonderFi, bringing Canadian crypto exchanges Bitbuy and Coinsquare under its umbrella and giving it access to about 300,000 funded customer accounts in Canada.

Crypto markets offer another route to private company exposure

While Robinhood pushes for a larger role in traditional capital markets, crypto trading venues have been building products that offer investors exposure to private companies before they reach public exchanges.

Several platforms now provide tokenized or blockchain-based alternatives tied to private market assets, including pre-IPO products from Bybit, Kraken and Coinbase. Those offerings have emerged alongside growing activity in onchain derivatives linked to private companies.

A report released Tuesday by Talos and Coin Metrics said pre-IPO perpetual futures traded on blockchain networks are increasingly functioning as a source of price discovery ahead of public listings. The report stated that participation comes from a mix of retail traders, crypto-focused investment firms and professional market makers.

SpaceX-related contracts on Hyperliquid have generated billions of dollars in trading volume and hundreds of millions of dollars in open interest, according to the report.

Talos and Coin Metrics also pointed to Cerebras Systems as an example of how those markets have tracked investor expectations. 

The report said Hyperliquid’s pre-IPO futures traded within about 1% of the stock’s eventual opening price after listing, even though the IPO itself was priced considerably lower by underwriters.