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After $363M round, stock trading app Robinhood now valued at $5.6B
Two months after it was reported that Robinhood Markets Inc. had engaged investors about raising a significant new funding round, the rumor has proven true.
The startup, which stands behind the hit stock trading app of the same name, today announced that it has received $363 million in venture funding. Five-year-old Robinhood is now valued at a staggering $5.6 billion. That’s four times higher than the valuation it received after its previous $110 million raise last April.
The startup’s rapid rise can be attributed to the Robinhood app’s simple but appealing value proposition: It lets consumers trade stocks without paying any brokerage fees. This model has enabled Robinhood to build up an installed base of 4 million users in just a few years. About 2 million have come aboard since last April’s funding round alone.
Besides the fact that it skips the fees charged by traditional brokers, Robinhood’s growth is also fueled by an aggressive product development roadmap. The past few months alone saw the startup launch a web-based version of the service and move into cryptocurrency trading.
The latter area is set to become an even bigger focus for Robinhood in the wake of the new funding. Robinhood co-founder Baiju Bhatt told Fortune that the plan is to expand its cryptocurrency trading service beyond the 10 states where it’s currently available to the entire country, as well as add support for more coins. Bhatt sees his startup becoming one of, if not the, largest cryptocurrency trading providers out there by the end of the year.
Judging by the rate at which Robinhood’s user base has been growing so far, that could very well happen. Bhatt’s optimistic projection for the crytocurrency market also helps explain why the startup’s investors are so enthusiastic about backing its expansion.
The newly announced round was led by DST Global, with participation from a Who’s Who of venture capital firms. The group included Kleiner Perkins Caufield & Byers, Sequoia Capital, Iconiq Capital and Alphabet Inc.’s CapitalG late-stage fund.
Robinhood has raised a total of $539 million so far.
Image: Robinhood
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