The Alphabet and Roc Nation-backed share trading platform operator reportedly secured the equity funding together with up to $600m in debt financing.
Robinhood, the US-based online trading platform developer that counts internet technology group Alphabet and entertainment agency Roc Nation as investors, confirmed yesterday it has raised $3.4bn in new equity funding.
Venture capital firm Ribbit Capital led the round, which also featured existing investors including Iconiq Capital, Andreessen Horowitz, Sequoia, Index Ventures and New Enterprise Associates (NEA).
A New York Times report on Friday stated the company had secured $1bn in equity financing from existing investors including Sequoia Capital and Ribbit Capital together with $500m to $600m through a credit line from six banks.
Robinhood operates an online platform that enables users to trade shares without paying commission, and recorded a recent high of 2.6 million daily users last week.
The extra cash was needed to cover minimum levels of capital required to meet regulatory demands related to a considerable growth in the trading of ‘meme’ stocks such as GameStop, AMC and Nokia in recent days.
The company needed $3bn to meet the collateral requirements of its clearing house as of Thursday, according to Reuters, which reported it is exploring the possibility of raising an additional $1bn in debt financing.
Jason Warnick, Robinhood’s chief financial officer, said: “This round of funding will help us scale to meet the incredible growth we have seen and demand for our platform.
“We are humbled by our customers’ response to our offering, and remain inspired by everyday people taking control of their financial futures.”
The company last raised money in September 2020, closing a $660m series G round at an $11.7bn post-money valuation when D1 Capital Partners added $460m to $200m it had already supplied along with Andreessen Horowitz, Sequoia Capital, DST Global, Ribbit Capital and 9Yards Capital.
GV, the Alphabet subsidiary then known as Google Ventures, joined Greenoaks Capital, Index Ventures, Rothenberg Ventures, Queensbridge Venture Partners, Social Leverage and Vaizra Investments in Robinhood’s $3m seed round in 2013.
Roc Nation unit Arrive invested an undisclosed amount in the company in February 2018, three months before Alphabet unit CapitalG, DST Global, Iconiq Capital, Sequoia Capital, Kleiner Perkins Caufield and Byers and existing investors including New Enterprise Associates (NEA) and Thrive Capital added $363m in series D funding at a $5.6bn valuation.
Robinhood closed a $373m series E round in late 2019 featuring DST Global, Ribbit Capital, NEA, Sequoia Capital and Thrive Capital at a $7.6bn valuation.
Sequoia Capital led a $600m series F round for Robinhood in June 2020 that valued it at $8.3bn, investing with NEA, Ribbit Capital, 9Yards Capital, Unusual Ventures, TSG Consumer Partners and IVP.
The latest round boosted the company’s overall funding to over $7bn. Its earlier backers included Queensbridge Venture Partners, Social Leverage and Vaizra Investments.
This article was adapted from an earlier version published prior to the most recent RobinHood announcement.
