Despite recent scrutiny, Robinhood sees a meaty cash bump.
Robinhood, the free stock trading app, recently received a $7.6 billion valuation after its latest round of funding.
This comes shortly after the company came under scrutiny due to concerns regarding its checking and savings accounts, which it launched last December. These accounts advertised a favorable 3% interest rate, but users became concerned over how these accounts would be insured.
Despite this controversy, Robinhood’s funding round was successful, largely due to several new initiatives the company rolled out over the past year.
What to Know About the Announcement
On Monday, Robinhood announced a $323 million Series E financing at a $7.6 billion valuation. This marks a $2 billion increase from the startup’s previous $5.6 billion valuation.
This funding round was led by DST Global — one of the company’s existing investors. Robinhood also generated investments from Ribbit Capital, NEA, Sequoia, and Thrive Capital.
Robinhood states that the new investments will be used to “keep pursuing our mission of democratizing finance for all.”
New Business Initiatives
Robinhood became a major player in the brokerage space after offering commission-free trading in 2013. Since then, the app has gained a large millennial following and forced major brokerages, like Fidelity and Charles Schwab, to lower their trading fees.
Over the past year, Robinhood has expanded its offerings by rolling out a number of enticing initiatives, in addition to the controversial checking and savings:
- Clearing by Robinhood — an in-house clearing system
- A new Robinhood Gold experience
- Multi-leg option strategies
- Robinhood Snacks — a financial news update initiative
- Cryptocurrency trading in over 30 states
The company is also growing its management team to help in pursuing new business ventures. That includes leaders for operations and finance.
What’s Next for Robinhood?
Since 2013, Robinhood is becoming a more popular option for consumers keen on commission-free trading.
The company works to add to its offerings of products and services. And despite the occasional misstep, Robinhood seems dedicated to its mission of democratizing finances for all.
Considering this new valuation, Robinhood’s platform could continue with that mission and new additions in the near future.
