Robinhood, the Menlo Park, California-based fintech startup credited with helping popularize trading among millennials, announced that it has raised another $320 million in latest funding from new and existing investors at a valuation of $8.6 billion.
Investors that took part in the current financing round include TSG Consumer Partners and IVP, and brings the seven-year-old online brokerage’s total fundraise to $600 million in a span of two months.
The funding round is widely being seen as a precursor to an initial public offering (IPO), according to analysts tracking the company, which has benefited from a surge in day trading, driven by consumers stuck at home during the Covid-19 pandemic.
Some traders and analysts have attributed rallies of between 300% and 500% in stocks of bankrupt or soon-to-be-bankrupt companies such as Hertz, Chesapeake, Whiting and JC Penney to retail investors using Robinhood, which has more than 10 million users.
Last month, Robinhood said it may make it harder to qualify to do sophisticated options trading on its platform and would improve its user interface. The California-based startup has also experienced several outages since early March, particularly on days of high trading volumes.
“Robinhood is on a mission to democratize finance for all. We believe it should work for everyone and not just a few. We offer commission-free trading in one, user-friendly platform,” according to the Company’s LinkedIn page.
Robinhood enables its customers to buy and sell U.S. stocks, ETFs, and options with zero commission. The trading platform also aims to make people comfortable storing money and trading stocks using its application. Founded in 2013, Robinhood Financial is an SEC registered broker-dealer and member of FINRA and SIPC.
Robinhood Financial LLC and Robinhood Crypto, LLC are wholly-owned subsidiaries of Robinhood Markets, Inc.
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