Robinhood makes expansion move

Author: Editors Desk Source: CNBC
March 7, 2024 at 21:25
Allen Berezovsky | Getty Images Entertainment | Getty Images
Allen Berezovsky | Getty Images Entertainment | Getty Images
Robinhood is looking to expand its reach beyond the tech and finance space and into sports and entertainment.

Robinhood is partnering with Klutch Sport Group, LeBron James’ agent Rich Paul’s firm, as the financial services company looks to expand its reach into sports, entertainment and media, the companies announced Thursday.

As part of the deal, Paul join as a strategic advisor to Robinhood. He will work closely with Robinhood CEO Vlad Tenev to identify new partnership opportunities in the sports and entrepreneurship space.

“We’re massive sports fans at Robinhood and we know our customers are as well,” Tenev told CNBC. “Working with Rich and the team at Klutch Sports, it’s really a way to get the Robinhood brand out there to a wider audience and partner with athletes and organizations that are aligned with our customer needs.”

Paul, who founded Klutch in 2012, represents some of the biggest names in sports, including James. In recent years, the group has expanded to connect teams, leagues and properties with global brands for partnerships.

Paul sits on the boards of United Talent Agency and Live Nation.

“I look forward to helping guide Robinhood as they broaden their reach into new markets and spaces,” Paul said in a statement.

Klutch said it has been connecting Robinhood executives with teams, owners and athletes as the company looks to expand its reach beyond tech and finance. For example, Klutch helped facilitate a three-year jersey patch deal between Robinhood and the National Basketball Association’s Washington Wizards in October.

The partnership is already paying off, according to Tenev. He said brand awareness for Robinhood has increased in the entire Washington D.C. Metro area since the partnership was announced.

During NBA All-Star Weekend, Robinhood did partnerships with NBA players Draymond Green and Trae Young and the WNBA’s A’ja Wilson — all represented by Klutch — around the company’s marketing of gold investment.

Robinhood also collaborated with jewelry make Ben Baller on a gold chain to help steer people to the event.

Tenev said he was drawn to Klutch because Robinhood’s story resonates with Paul’s background.

“He built up his business and his brand from nothing — from selling vintage jerseys in the Akron airport,” he said. “When you think about what Robinhood represents, it represents access and entrepreneurship.”

Robinhood, the trading and investing platform, has said it has introduced tens of millions of first-time investors to the markets. The company, which bills itself as a more accessible investing option, has said its users are more racially diverse than those of incumbent brokerages.

Tenev also addressed the recent surge in the value of cryptocurrency, attributing the rise in part due to customers investing in ETFs that were previously unable to hold crypto exposure.

“You’re starting to see it more mainstream and getting integrated further and further into the traditional financial system,” he said. “I think Robinhood can play a leading role in the acceleration of kind of crypto and traditional finance, merging together and making it more useful over time.”

The trading platform’s stock is up nearly 30% this year.

Correction: Rich Paul is joining Robinhood as a strategic advisor. A previous version of this story misstated his position with the company.

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