Robinhood Knows a Thing or Three About Raising Money - MBrew

 

FINTECH Robinhood Knows a Thing or Three About Raising Money Francis Scialabba The stock trading startup Robinhood announced a $200 million Series G round yesterday, continuing its march through the fundraising alphabet. Robinhood’s updated 2020 funding report: May: $280 million raised July: $320 million raised Yesterday: $200 million raised Know your brokerage: Robinhood rose to prominence by offering users a hassle-free signup process, sleek design, and zero-fee trading. Its latest round of funding values it at $11.2 billion, up almost $3 billion from May and nearly 9x its 2017 valuation.    What’s behind the growth? Robinhood is adding users faster than people who live alone in NYC add house plants. The company said it surpassed 13 million users in May, 3 million of which had jumped aboard since the start of 2020. And it’s making money off trades at a faster rate than its competitors, too.  In June, Robinhood traders carried out 4.3 million “daily average revenue trades,” a key metric used by brokerages. That topped TD Ameritrade and Interactive Brokers and exceeded the combined total of E-Trade and Charles Schwab.  Keep a firm grip on those horses of yours Robinhood’s key selling point is that it makes trading accessible to a wider range of people. But after a Robinhood user died by suicide in June when he saw a negative $730,000 balance in his account, critics pointed out that Robinhood may encourage reckless financial decisions by overly gamifying options trading.  Also slowing the Robinhood hype train: outages on one of the busiest trading days of the year and a postponed rollout in the UK.  Looking ahead...Robinhood’s latest fundraising round has investors wondering when it will finally go public. But eye-popping user growth ≠ profitability. Robinhood probably still operates at a loss as it pumps money back into the company and explores revenue streams beyond its core brokerage business. Two potential options: retirement planning and peer-to-peer money transfers. “We believe that if you’re going to have a single app on your phone, we want Robinhood to be the money app,” Robinhood’s COO told Barron's.