TOPLINE
Robinhood on Monday announced another round of financing – the third major cash injection in the last four months – at a valuation of $ 11.2 billion, amid record numbers of new customers and speculation that the company could IPO later this year.
Robinhood co-founders Baiju Bhatt and Vladimir Tenev.
KEY FACTS
The trading start announced a fresh $ 200 million, Series G financing round from New York-based D1 Capital Partners, and its valuation by nearly $ 3 billion.
The 7-year-old investing app was most valued at $ 8.6 billion in its last round of financing in July, when it raised $ 320 million.
The latest investment comes amid a period of record growth for Robinhood, which has been booming during the coronavirus pandemic as many younger investors jumped into the stock marble.
The company added 3 million new client accounts in early 2020 and most recently said it saw 4.3 million daily average revenue trades (DARTs) in June, which was better than any other publicly traded broker.
Amid the trade boom and emergence of new retail investors, Robinhood doubled the amount of money it made roughly last quarter, according to recent SEC reports.
Founders Vladimir Tenev and Baiju Bhatt, who started the company in 2013, have long advocated for it to go public, but although there is growing speculation that it could IPO later this year, Robinhood is not yet specific. provide plans to do so.
Large number
With the latest $ 200 million investment, Robinhood has now raised a total of $ 1.7 billion, according to Crunchbase.
Crucial quote
“With this funding, we will continue to invest in improving our core product and customer experience,” Robinhood said in its press release.
Tangent
D1 Partners joins a list of other high-profile Robinhood investors, including the Sequoia fund, Kleiner Perkins and Google’s venture capital arm, GV.
What to see
Robinhood’s success during the coronavirus pandemic has also been met with criticism on Wall Street. The company is currently facing more than a dozen lawsuits after its platform went down for two full days two months ago in March, leaving customers locked out of accounts for the markets on a historic day. What’s more, there are concerns that the company is paying too much attention to younger users who do not fully understand the need for high-risk trading, especially around options. One of Robinhood’s unexpectedly young options traders, a 20-year-old college student from Illinois named Alex Kearns, died in suicide in June after mistakenly thinking he owed Robinhood more than $ 730,000 because his account regulated had not yet reflected transactions in his account. Two days later, the founders of Robinhood published a statement promising to add qualification criteria, educational resources and upgrades to their merchant user interface.
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Robinhood doubled its trading sales in the second quarter, reaching $ 180 million (Forbes)
20-year-old Robinhood customer dies by suicide after seeing a negative balance of $ 730,000 (Forbes)
Robinhood founders react to Alex Kearns’ suicide with major changes in trading platform (Forbes)
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