Zero commission stock and cryptocurrency trading app Robinhood is sitting atop an $8 billion valuation as the company seeks fresh funding from Sequoia Capital, one of the most prominent VCs in Silicon Valley.
An eye-popping valuation
The free trading app could be valued at $8 billion in a late-stage funding round. Bloomberg recently reported that the company is negotiating a fresh $250 million capital infusion from Sequoia Capital, one of the largest venture investors in Silicon Valley. A final deal is yet to be struck between the two.
The most recent funding round for the company was led by DST Global and other VC firms. The Series E round helped raised $323 million for the company. In July 2019, when this funding was raised, the company was valued at $7.6 billion, a $2 billion increase from its Series D valuation in the previous year.
Robinhood’s many achievements
The app has been breaking user records for some time now. It crossed the 10 million user mark by 2019 and has only been around for six years. The explosive growth of the app has also led to many traditional brokerage firms creating their own zero commission models to attract younger investors. This makes Robinhood an industry leader and trendsetter. Interestingly, the app now has as many users as TD Ameritrade, a brokerage firm that has been around since 1975. Another popular brokerage E*TRADE has only 4.9 million accounts with a 7% annualized growth rate.
The app has its issues as well. For instance, a lot of users were frustrated at the beginning of March 2020 because of some issues in the app which denied their access to their accounts. The customer service of the app is also known to have long wait times.
However, Robinhood is still the go-to investment app for the millennials. The app makes investing easy and provides several benefits to the users as well. It also gives them access to several asset classes without charging a fee for each transaction. It also has a bank-account-like feature that gives customers a no-fee debit card and pays them a 2.05% interest.