CHARLOTTE, N.C. — California-based stock trading firm Robinhood is expanding operations to Charlotte which will create nearly 400 new jobs in Mecklenburg County, North Carolina Governor Roy Cooper announced Tuesday.
The company will invest $11.7 million to establish an office in Charlotte focused on customer experience roles.
“With the second-largest financial center in the nation, North Carolina is one of the fastest growing tech hubs where companies like this know they can flourish,” said Governor Cooper.
Robinhood, which was founded in 2013, is known for pioneering commission-free trading with no account minimums, lowering the barriers for millions of investors to participate in the financial markets primarily through a mobile app.
“If they can make it less expensive for people to get involved, then that’s a good thing,” explained Michael Baker.
Baker is a financial advisor and founder of Vertex Capital. He says he generally agrees with Robinhood’s mission, but he says so with caution.
“We have to be very careful about not just saying here are the tools, go have fun. But here are the tools and providing education and support and helping people understand what they’re actually dealing with,” said Baker.
Some financial experts and congressional leaders agree, saying Robinhood’s platform is the gamification of investing with the perception of little to no risk.
“The Robinhood user is someone who is kind of a do-it-yourselfer. Investing on their own and using that technology as a retail platform,” said Baker.
Novice investing has taken off. Fueled in part by the Gamestop controversy. Earlier this year, Robinhood restricted trading the GameStop stock in order to, as they say, conform to regulatory capital requirements. This after millions of retail investors pumped the price, bankrupting at least one hedge fund.
“It felt like to a lot of people that they were giving the hedge funds a way out for them to cover themselves, so there were a lot of people very very upset about that,” said Baker.
The Robinhood CEO recently defended his actions in front of congress.
“We don’t answer to hedge funds. We serve the millions of small investors who use our platform everyday to invest,” said Vlad Tenev, the CEO of Robinhood.
“Leadership teams that can weather these things are stronger because of it and they become killers. Just crush it out there,” said Charlotte City Council member Tariq Bokhari.
Bokhari also heads Carolina Fintech Hub. They worked to bring Robinhood to the Queen City.
“When companies get here, they realize how special our talent market is,” said Bokhari.
He says Robinhood and companies like them are here to stay, and that Charlotte’s deep pool of workers in regulatory compliance, cyber security, and risk management will play a key role in Robinhood’s growth.
“That’s exactly what you need in order to be a big public company,” said Bokhari.
Robinhood could receive nearly $4 million dollars in state incentives over the next 12 years. The city is offering about $150,000 dollars in incentives as well.
The new positions at the Charlotte-based location will include analysts, customer service staff, and operations personnel. The average annual salary for all new positions exceeds Mecklenburg County’s overall average annual wage of $71,689, creating a potential payroll impact of more than $29.7 million per year.
“We welcome Robinhood’s new jobs and investment to North Carolina,” said Commerce Secretary Machelle Baker Sanders. “This expansion is evidence that our exceptional pipeline of diverse and highly-skilled tech talent, along with our budding entrepreneurial landscape, will continue to attract the fintech industry and grow our innovation economy.”
Robinhood’s expansion in North Carolina will be facilitated, in part, by a Job Development Investment Grant (JDIG) approved by the state’s Economic Investment Committee earlier today.
Over the 12-year life of the grant, the project is estimated to grow the state’s economy by more than $800 million, according to a news release. Using a formula that takes into account the tax revenues generated by the 389 new jobs, the JDIG agreement authorizes the potential reimbursement to the company of up to $3,006,000 spread over 12 years. Payments for all JDIGs only occur following performance verification by the departments of Commerce and Revenue that the company has met its incremental job creation and investment targets. By law, JDIG projects result in positive net tax revenue to the state treasury, even after taking into consideration the grant’s reimbursement payments to a given company.
Because Robinhood is opening an office in Mecklenburg County, classified by the state’s economic tier system as Tier 3, the company’s JDIG agreement will result in the allocation in as much as $1 million into the state’s Industrial Development Fund – Utility Account. The Utility Account helps rural communities finance necessary infrastructure upgrades to attract future business and new jobs. When new jobs are created in a Tier 3 county such as Mecklenburg, the new tax revenue generated through JDIG grants helps more economically distressed communities elsewhere in the state. More information on the state’s economic tier designations is available here.
“With this announcement by Robinhood, Charlotte further cements itself as a leading city for the ever-growing fintech industry. Our city’s strong concentration of talent creates an ideal pool for companies who are looking for innovative and skilled workers,” said Tracy Dodson, Assistant City Manager and Economic Development Director. “We’re excited for the new career opportunities that Robinhood’s jobs will provide for our community.”