Robinhood Adds to Latest Funding Round for $600 Million Total
The popular trading app Robinhood has just announced that it’s raised even more money. As TechCrunch reports, the FinTech has more than doubled its previously declared $280 million Series F by raising another $320 million. Following this round, the investment platform is now valued at $8.6 billion. For the record, the additional funds were raised at the same valuation as the rest of the round, although the extra cash has pushed the company’s worth from $8.3 billion in May up to the current figure.
While the prior portion of the round was led by Sequoia Capital with participation from NEA, Ribbit Capital, 9Yards Capital, and Unusual Ventures, the latest investors include IVP and TSG Consumer Partners. According to Robinhood, the funds will go toward hiring more employees, developing new products, and other such growth efforts.
The increase in funding comes during what’s been a roller-coaster year for Robinhood. On the bright side, the company has seen record growth domestically amid a unique market. In fact, while Robinhood started 2020 with 10 million active users, that figure ballooned to 13 million within the first few months of the year. What’s more, this influx of customers came in spite of increased competition from discount brokerages like Charles Schwab and E*Trade, which cut their trade commissions to $0 late last year. Additionally, the company plans to expand to the United Kingdom — although that timeline has been delayed some due to the pandemic.
Meanwhile, the app’s popularity has also yielded some issues and controversies. For example, Robinhood’s trading platform has suffered some outages, including two that fell on back-to-back days in March. More recently, the company also drew criticism when 20-year-old Alex Kearns tragically took his own life after seeing an account balance of negative $730,000 — the result of his options trades not yet settling. In a statement following the heartbreaking incident, Robinhood’s co-founders and co-CEOs Vlad Tenev and Baiju Bhatt wrote, “We are personally devastated by this tragedy… It is not lost upon us that our company and our service have become synonymous with retail investing in America, and that this has led to millions of new investors making their first investments through Robinhood. We recognize this profound responsibility, and we don’t take it lightly.” The duo also shared some changes they were considering regarding their option trading products.
Despite some notable setbacks, Robinhood now seems to be back on a positive path. Yet, that doesn’t mean that there’s not some uncertainty ahead as its unclear when the company might go public — something they’ve long planned to do. Perhaps once the market stabilizes a bit and some of these current controversies have subsided, the app will find itself among the many stocks it allows just about anyone to trade.