Robinhood Raises $323 Million for $7.6 Billion Valuation
The popular commission-free investment app Robinhood just received a major investment of their own. As CNBC reports, this week the company has announced it had it closed a $323 million Series E funding round led by DST Global with participation from Ribbit Capital, NEA, Sequoia, and Thrive Capital. What’s more, the latest round valued Robinhood at an impressive $7.6 billion.
According to Crunchbase, the Series E brings Robinhood’s total funding to date up to $862 million. That puts it just $138 million short of Minotaur status — AKA $1 billion in funding. In a blog post the company said they’ll use the funds to “keep pursuing our mission of democratizing finance for all.”
Not only is Robinhood’s funding round notable for its size but also for its timing. Last December the company caught the attention of the Securities Investor Protection Corporation by announcing plans for a “Checking & Savings” account that would pay 3% interest. Unfortunately Robinhood was forced to backtrack on that proposition once it was revealed that they failed to speak with regulators ahead of time. Currently a banner for their rebranded “Cash Management” account remains on their website although there haven’t been any updates as of late.
In better news, Robinhood reports that their Robinhood Crypto feature is now available in more than 30 states. Additionally the company recently acquired MarketSnacks to launch a financial newsletter titled Robinhood Snacks. The company also writes, “Since May of last year, we’ve launched our own clearing system, Clearing by Robinhood; rolled out a new Robinhood Gold experience including Nasdaq Level 2 Market Data; and introduced multi-leg options strategies.”
At the end of last year, Robinhood had a reported six million users. However their influence has reached beyond that, leading more traditional brokerage firms to cut trade fees and pursue the Millennial market that Robinhood had helped court. More recently other FinTechs have also introduced commission-free trading, including SoFi’s Active Investing platform. Incidentally that offering now allows customers to purchase fractional shares in select stocks — something Robinhood does not yet support.
While there was hardly a doubt that Robinhood would rebound from last year’s savings account scandal, it would seem that this major funding round is closing the door on that chapter of the company. Looking to the future, the FinTech has previously made it clear that they hope to be publically traded. Plus, back in April, Robinhood applied for a bank charter that, if approved, could change the scope of the company. All this suggests that there are still big things ahead for Robinhood as they put their newfound capital to work.