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Robinhood Nears $250 Million Funding at $8 Billion Valuation

Robinhood Markets, the closely held trading platform, is close to raising $250 million at a premoney valuation of $8 billion, a media report says.
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Robinhood Markets, a closely held online-trading platform that endured repeated outages during last month’s volatile market action, is reportedly raising more cash.

The $250 million it’s seeking would put its valuation at about $8 billion before the money is added, sources told Bloomberg. Robinhood’s most recent valuation was $7.6 billion after its most recent funding round, in July.

Robinhood made its name by offering free trading for stocks, exchange-traded funds and options on its website and mobile app. Traditional brokerages like Charles Schwab  (SCHW) - Get Charles Schwab Corporation Report and Fidelity adopted free stock and ETF trading last year as well.

The new investment round would be led by venture-capital titan Sequoia Capital, the sources said. They also noted that a final deal hasn’t been reached and may not happen.

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As for Robinhood’s recent outages, on March 2, when the S&P 500 jumped 5%, its trading system went dark for the whole session. Robinhood attributed the outage to massive trading by its existing customers and record-high new account sign-ups.

In a March 3 statement, the Menlo Park, Calif., company said, “Our team is continuing to work to improve the resilience of our infrastructure to meet the heightened load we have been experiencing. 

"We’re simultaneously working to reduce the interdependencies in our overall infrastructure. We’re also investing in additional redundancies in our infrastructure.”

The market turmoil has certainly been good for Robinhood’s top line, with revenue totaling $60 million in March, about triple the figure from a year earlier, one of Bloomberg’s sources said.