Robinhood Raises $660M via Series G Funding during Lockdown Trading Surge

UTC by James Lovett · 3 min read
Robinhood Raises $660M via Series G Funding during Lockdown Trading Surge
Photo: Depositphotos

Robinhood will use the raised capital to support its core product and enhance the customer experience.

Per the Robinhood spokeswoman announcement on September 23, the latest funding surge out of the Series G funding round has raised the corporation valuation of the fintech to $11.7 billion.

In August, D1 Capital Partners, New York-based hedge fund, had invested $200m in Robinhood – according to the company’s announcement. Therefore, the latest funding is just an extension of the first Series G round.

Ribbit Capital, Andreessen Horowitz, 9Yards Capital, Sequoia, and DST Global are the new and stalwart investors in the app reportedly to have taken part in the extension. According to the latest Series G funding round report of the company, stocks and cryptocurrencies have attracted many Retail traders to trade on the popular app.

The company will use the raised capital to support its core product and enhance the customer experience mainly. Recurring investments and cash management are other new offerings that will depend on these funds.

Despite Successful Robinhood Series G, the Ride Not So Rosy

During the recent months, the company has had a bumpy ride despite the current demand increase for the app’s services and investor confidence rise that has attracted locked-in traders.

Setbacks this year that the company has faced has really affected the performance. Sharp price drops made the trading platform to suffer recurring outages as volumes surged in February and March. 

During peak trading in April, it crashed three times as Robinhood reportedly sought additional capital to cover for the platform’s stresses that occurred in March. As a result, a lot of traders made heavy losses as they were unable to log in to their accounts on such a historic day for the markets.

 A group of customers even demanded compensation after filing a class-action lawsuit in California. Following that action, Robinhood has arguably compensated some of the allegedly affected traders during the March incidence. 

Up to now, Robinhood has managed to raise around $1.25 billion from investors’ contributions as well as secured another $2 billion total capital amount.

Free Stock Trading

Although most trades in Robinhood are free, the company relies on a paid premium subscription service and customer order flow to generate revenue. A goal that is described as “democratizing finance” via free stock trading. By selling its customers’ orders to various electronic trading companies like Citadel Securities, the app is able to raise a substantial amount of its revenue.

Out of the retail trading boom that occurred this year, the Robinhood platform has been categorized as one of the big winners – especially when it was the first time for locked-down punters. 

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James Lovett

James Lovett is a talented crypto enthusiast who finds pleasure in sharing more knowledge on fintech, cryptocurrency as well as blockchain and frontier technologies. He likes to keep himself furnished and updated with the latest innovation in the crypto industry, blockchain technology, Internet of Things (IoT) and other technologies. As a result, he tries to furnish ardent crypto supporters with the latest news on blockchain and distributed-ledger technologies. Indeed, Blockchain and Cryptocurrency is changing the world as we know “one block at a time”. As a hobby, he also trades in small amounts of cryptos every now and then. An author with experience writing for tech, digital, and cryptocurrency blogs!

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