The stock trading startup was last valued at $ 7.6 billion after last summer’s round.
Robinhood is in the process of raising more than $ 200 million in new capital at an estimated $ 8 billion, according to two people familiar with the deal who asked not to be identified because the details are not conclusive.
The $ 8 billion price tag is an estimate before this new capital is injected. According to sources, venture capital firm Sequoia Capital is leading the fundraising, which involves a number of investors.
Robinhood and Sequoia declined to comment on funding previously reported by Bloomberg.
The Menlo Park, California-based startup offers stocks, cryptocurrency trading and options, as well as a cash management account for more than 10 million customers as of December. Robinhood offers most deals for free and earns money from the flow of customer orders and subscription plans.
Its core business is booming amid heavy market activity, with retail revenue reaching historic levels in recent weeks, according to one familiar with the platform’s performance. Markets in the US have been down because of COVID-19 and its effect on the global economy, and corporate profits are beginning to show the extent of the damage.
In March, Robinhood noted that the volume of trade increased when retail activity increased. The average daily trading volume was three times higher than in the fourth quarter, according to a spokesman for Robinhood. The startup also saw a 10-fold increase in net deposits over the fourth quarter average monthly average.
In March, Robinhood experienced multiple interruptions to the platform. One of these days coincided with a historic profit for the Dow Jones Industrial Average, which left traders ‘on the bench’. Robinhood said it was caused by ‘historic market conditions’ and trade volume, and that since then its team has been improving infrastructure and some of the ‘major problems’ that have led to disruptions.
The company has raised more than $ 900 million so far and was last valued at $ 7.6 billion after last round last summer. Robinhood is backed by Klineer Perkins, NEA, Sequoia, Thrive Capital and Ribbit Capital.