Robinhood Teams With Baidu to Offer U.S. Stock Trading in China

  • Baidu’s StockMaster app to integrate Robinhood service
  • StockMaster uses artificial intelligence to predict moves

Robinhood, the no-fee online brokerage app, has partnered with Baidu Inc. to offer its U.S. stock trading service to customers in China.

Chinese investors can buy any U.S. stocks or exchange traded funds without paying commission by downloading Baidu’s StockMaster app and creating an account, Robinhood said an e-mailed statement.

Robinhood is up against a growing number of online brokerages bringing U.S. markets to China, including Tiger Brokers and Hong Kong-based Futu Securities Ltd., which is partly backed by Tencent Holdings Ltd. Another Hong Kong-based company, 8securities, also recently started a zero-commission trading platform.

Baidu’s StockMaster app uses artificial intelligence to predict how certain stocks and markets will move. The Chinese search giant has made significant investments in financial technology -- as have its rivals Tencent and Alibaba Group Holding Ltd. -- partnering with China Citic Bank Corp. and starting a financial technology incubator in Hong Kong.

Palo Alto, California-based Robinhood will explain the value of its services “by tying the U.S. stock market to brands that people love - like Apple, Tesla, Baidu, Alibaba,” co-founder Vladimir Tenev said in an interview.

The growing crowd of stock-trading apps are seeking to capture a piece of the Chinese investing market that’s dominated by mobile-first retail investors. Overseas stocks offer an alternative to a cooling real estate market and local equities that have been battered by wild swings in the past year.

Founded in 2013, Robinhood has grown to over $6 billion in trading volumes from more than 1 million customers. The company plans to release a standalone app in China in addition to the integration with Baidu. It has set up a wait list for the standalone app in April, which has signed up almost 25,000 Chinese residents.

The move into China by Robinhood follows a stalled expansion to Australia that has yet to take off. Despite announcing plans to let Australian investors trade U.S. stocks more than a year ago, the service still hasn’t started.

While the Robinhood app doesn’t charge for trades, it makes money by collecting interest on uninvested cash in customer accounts and plans to generate revenue from margin trading. So far, the startup has raised $66 million from investors including Andreessen Horowitz, Google Ventures, NEA and celebrities like Jared Leto and Snoop Dogg.