FinTech: Robinhood Raises $280 Million in Series F Funding Led by Sequoia

May 5, 2020 | FinTech, News
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The social trading and investing app garnered a valuation of $8.3 billion for the funding.

Robinhood Markets Inc, the pioneer of app-based, commission-free trading, homed in on two lucrative targets Monday. The fintech raised a $280 million series F funding at a valuation of $8.3 billion. The round was led by existing investor Sequoia Capital, with participation from existing and new investors. These included NEA, Ribbit Capital, 9Yards Capital, and Unusual Ventures. (FINOVATE)

The firm raised $323 million in mid-2019 in a Series E round that valued it at $7.6 billion.

During the first quarter, the firm has benefited from a heavy influx of new customers due to the heightened market volatility and lockdown orders triggered by the coronavirus outbreak. It has reportedly added 3 million funded accounts within this year. As a result, it has enjoyed record revenue growth.

Robinhood undeterred by outages and Corona

The millennial-focused brokerage was in the news in March for all the wrong reasons after a series of outages during crucial trading days. However, that does not seem to have affected investors’ appetite for fintechs.

Neither did the coronavirus pandemic and its implications for a global recession.

“Amid challenging times and market volatility, we’re humbled that people are turning to Robinhood to participate in the markets and build their financial future,” said Robinhood in its blog.

The brokerage said it will use the new funding to scale up its platform and develop new products. It will also accelerate the buildout of its operations. It said it will hire more top talent at its offices including the newest one in Denver.

“Robinhood has made the financial markets accessible to the masses, and in turn, revolutionized the decades-old brokerage industry,” said Andrew Reed, partner at Sequoia.

The rate of growth in Robinhood’s successive valuations appears to be tapering off.

However, it is nonetheless creditable that the firm could score an increase in the latest funding round given the market conditions. It should also be viewed in the context of the heavy hitter competition that the company faces. Peers include Charles Schwab (NYSE: SCHW), E-Trade (NASDAQ: ETFC), Ameritrade (NASDAQ: AMTD), and Fidelity.

Related Story:   FinTech: Robinhood’s Outages on Two Historic Trading Days – Lawsuits Emerge

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