FinTech News
Robinhood Raises Another $200 Million Amid Rapid Growth
Even as the coronavirus pandemic continues to batter the United States economy at large, the stock markets have largely managed to recover. In fact, the S&P 500 reached a record high this week, likely rewarding users who bought during this year’s lows. Among these “winners” are users of the free stock trading app Robinhood who famously flocked to the market as it fell. Now it seems that the app itself is also experiencing some bright days, raising even more money. The investment platform announced this week that they’d raised another $200 million. The Series G was led by D1 Capital Partners.
This is actually the third time this year that Robinhood has announced new fundraising. In May, the company revealed a $280 million Series F that was later upped by $320 million (for a total of $600 million) in July when IVP and TSG Consumer Partners came aboard. According to Crunchbase, Robinhood has now raised $1.7 billion to date. Also notable is that, while the recent Series F valued that company at $8.3 billion, the latest round was raised at an $11.2 billion valuation.
It’s not hard to figure out why investment firms have been targeting Robinhood in recent months. Alongside other consumer brokerage firms, the app has seen a surge in new users since the coronavirus pandemic struck. However, beyond an increase in trade volume, the company notes that users are increasingly consuming original content including educational materials from the platform.
For example, in a blog post announcing the funding, Robinhood said that the number of unique daily visitors to their Learn resources has increased 250% since the beginning of the year. Additionally, they report that more than 20 million people currently subscribe to their Robinhood Snacks newsletter, while the accompanying podcast has 1.9 million monthly active listeners.
With the added funds, Robinhood not only intends on continuing to improve its core product but also plans on better serving its customers by hiring additional team members. As they write, “Robinhood has empowered millions of people to invest and participate in the U.S. financial system. To ensure we continue to meet our customers’ needs, we’re hiring hundreds of new registered financial services representatives this year in Southlake, Texas, and Tempe, Arizona.” The blog post continued, “Across all of our locations, we’re adding new team members to help us reduce response times, build more self-service tools, and enhance our informational and educational tools.”
Despite a few setbacks in that last year, it now seems that Robinhood is marching forward to greater success. The speed with which they’ve been raising money in recent months — and growing their valuation along the way — signals that big things are in their future. Could that mean an initial public offering could be in the cards? It’s definitely possible, but we’ll have to wait and see.
