No-fee investing app Robinhood has landed an $8.three billion valuation after it raised $280 million in Sequence F funding, the corporate confirmed at this time. Sequoia Capital, considered one of Silicon Valley’s largest enterprise buyers, led the spherical that was joined by returning buyers, together with NEA, Ribbit Capital, 9Yards Capital, and Uncommon Ventures.
Saying the brand new mega-round Monday, Robinhood stated it had grown quickly in 2020, having added three million funded accounts up to now this yr. The Silicon Valley startup, principally utilized by millennials to commerce shares and cryptocurrency, stated in December 2019 it had hit 10 million accounts milestone, up from its a million subscribers in 2016 and 6 million accounts in 2018.
To place these spectacular metrics in context, the New York startup has been in a position to carry on extra prospects than TD Ameritrade, which onboards 11 million customers and has been within the on-line brokerage business since 1975. One among Robinhood’s largest opponents, E-Commerce, had 4.9 million brokerage accounts on the finish of 2019, with an annualized new account progress price of seven %.
A part of the brand new funding spherical will definitely go to enhance its app’s infrastructure-related points. A good variety of its customers had been pissed off with making an attempt to determine how they fared through the first week of March 2020. Shoppers have complained about not accessing their accounts and having lengthy wait occasions for customer support.
Robinhood’s most up-to-date funding got here from a $323 million Sequence E spherical led by DST International and different enterprise capital corporations, together with Sequoia. On the time, in July 2019, the deal had put its valuation at $7.6 billion, up $2 billion from its Sequence D valuation in 2018.
Six years after Robinhood launched with no-fee buying and selling, main brokerages had been catching up with a wave of fee-eliminating bulletins over the previous two months. Within the span of just some weeks, almost all US on-line brokers eradicated commissions, which could possibly be a direct hit to the startup that kicked off the pattern in 2013.
Robinhood’s providing is especially well-liked among the many “millennial” inhabitants, who recognize the convenience of utilizing the app to commerce a number of asset courses with out charges. The corporate additionally unveiled plans for a financial institution account-like function that may pay prospects 2.05 % curiosity and provide a no-fee debit card service.