Robinhood trading comes to Canada, but what does that mean for investors?
California-based financial services company Robinhood Markets Inc. completed its purchase of Toronto-based cryptocurrency trading platform WonderFi Technologies Inc. for $250 million this week. However, this does not mean Canadians will be able to trade stocks on its popular platform anytime soon.
The deal was initially announced almost a year ago and is relatively small, given that Robinhood has a market cap of around US$78 billion, larger than most Canadian companies. It also is not Robinhood’s first foray into Canada, as it established an engineering division and Canadian headquarters in Toronto in 2024 and currently employs about 240 people there.
What is Robinhood?
Founded in 2013, Robinhood entered the market with the goal of allowing investors to trade without paying commissions. The company argued that institutional investors could access public markets at dramatically cheaper prices than the rest of the public, and that this dynamic was inherently wrong. It launched an iPhone app in 2014 and expanded to Android in 2015. By August 2015, the company reported transactions worth US$1 billion through its platform. In 2019, Robinhood introduced fractional shares, enabling users to invest in expensive stocks. Over time, it added retirement accounts, options trading, cryptocurrency trading, and stock market access. Its popularity surged during the COVID-19 pandemic as Americans started investing from home, drawn by the app’s simplicity and quick setup.
What can it offer to Canadians?
Robinhood offers many financial products in the United States, but its offerings in Canada will be exclusively focused on cryptocurrency, according to spokesperson Garret Shaw. By acquiring WonderFi, Robinhood now owns cryptocurrency platforms Bitbuy and Coinsquare. Customers using those apps will be invited to migrate to Robinhood in the coming weeks. The Robinhood app will be generally available on app stores soon, though the immediate priority is onboarding existing customers. The company promises lower costs with a transparent, flat 0.5% fee per Canadian trade and a best-in-class user interface.
Why the acquisition matters
Robinhood is expanding in Canada at a time when the government is encouraging more competition in the financial sector through measures such as cutting fees and simplifying account switching. If Robinhood eventually expands its services beyond crypto, it could compete with alternative financial services like Wealthsimple Inc. and the investing divisions of major banks. For now, however, the company has not announced any such plans.
