What the $13B E-Trade deal says about Robinhood’s valuation

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Today we’re living up to the introduction of this daily column by digging into the recently announced E-Trade sale and what its new price and recent financial performance can tell us about Robinhood, a startup competitor, and the unicorn’s valuation.

As always, when we’re comparing a fast-growing, private company in contrast to a larger, more mature, slower-growing, and profitable business, we’re working in broad strokes. But if we don’t take our contrasts too literally, we’ll be able to learn a thing or two.

After all, Robinhood is not only a richly-valued unicorn, it’s also a leading player in the burgeoning fintech and finservices startup niches, a sector we recently learned has capital flowing in at nearly record rates. So what we can learn about the value of Robinhood comps should prove illustrative and important.

We’ll start with an overview of the E-Trade sale, dig into its 2019 results and then compare the resulting multiples (with reasonable amounts of caveating, of course) to what we know about Robinhood. This will be fun!