Robinhood raises another $320 million at an $8.6 billion valuation

Investors are adding hundreds of millions more to Robinhood’s coffers as the pandemic ushers in new customers.

On Monday, the stock-trading app announced that it had raised yet another $320 million from new and existing investors, bumping its valuation up to $8.6 billion. New investors include TSG Consumer Partners and IVP.

The fresh funding comes via subsequent closings of a $280 million Series F round led by Sequoia Capital which valued the firm at $8.3 billion in May. At the time, co-CEO Vlad Tenev noted that Robinhood experienced a surge as new investors flocked to the platform amid the market’s coronavirus-induced ups and downs: Robinhood added 3 million funded accounts between the start of the year and early May, he said.

While Robinhood’s team declined to comment on the most recent raise, two months later, the app’s name is perhaps more visible than ever as the pandemic has enabled strange moves in the public markets thanks to retail investors that were once seen as marginal and unlikely to shift the market.

For instance: Shares of Hertz, the car-rental company, soared in June after it filed for Chapter 11 protection in June, a move that many attributed to nonprofessional players willing to take more iffy trades, including those on Robinhood. It was hardly a move a typical investment advisor would have condoned, but some investors appeared to make quite a bit off the bet.

Now Robinhood is confronting a core issue as it grows: What level of freedom does it give to its pool of inexperienced traders and what guardrails does it put in place? The platform grew explosively in part by pitching “investing for everyone”—yet not everyone understands the stock market and its complexities.

A 20-year-old Robinhood trader by the name of Alex Kearns committed suicide in June, citing massive trading debts and a negative trading balance of over $730,000 wracked up through options trading on the platform. While the suicide ultimately appeared to be the result of a terrible misunderstanding over the amount of Kearns’ actual debt, Robinhood’s Tenev and Co-CEO Baiju Bhatt wrote in light of the death that they were “considering additional criteria and education for customers” seeking certain kinds of more complex options trading, and planned to add additional educational content for customers.

“It is not lost upon us that our company and our service have become synonymous with retail investing in America, and that this has led to millions of new investors making their first investments through Robinhood,” the duo wrote in June. “We recognize this profound responsibility, and we don’t take it lightly.”

Lucinda Shen
Twitter: @shenlucinda
Email: [email protected]

VENTURES DEALS

- UiPath, a New York-based robotics automation company, raised $225 million in Series E funding. Alkeon Capital Management led the round and was joined by investors including Accel, Coatue, Dragoneer, IVP, Madrona Venture Group, Sequoia Capital, Tencent, Tiger Global, Wellington, and funds and accounts advised by T. Rowe Price Associates.  

- Harbour BioMed, a Shanghai-based biopharmaceutical company seeking to find a cure for Covid-19, raised $102.8 million in Series C financing. Hudson Bay Capital led the round. Read more.

- Meishubao, a Chinese online painting platform, raised $40 million in extended Series C funding. Tencent led the round. Read more.

- Lanistar, a London-based banking alternative, raised £15 million ($18.9 million) from Milaya Capital.

- Paige, a New York-based computational pathology company, raised $15 million from Goldman Sachs Merchant Banking Division.

- Beekeeper, an Oakland, Calif.-based communication and operations platform for frontline workers, raised $10 million in extended Series B funding. Energize Ventures led the round and was joined by investors including HighSage Ventures, SwissCanto, Thayer, Swisscom, Investiere, Alpana Ventures, and Swiss Post. 

- CompanyCam, a Lincoln, Ne.-based app maker for residential contractors, raised $6 million in Series A funding. Blueprint Equity led the round.

- Verikai, a San Francisco-based Insurtech company, raised $6 million in Series A funding. ManchesterStory led the round.

- Honey Mama's, a Portland, Ore.-based maker of a honey-cocoa bar, raised $4.5 million from Amberstone Ventures. 

PRIVATE EQUITY

- An affiliate of H.I.G. Europe acquired a controlling stake in Project Informatica S.r.l., an Italian information technology company. Financial terms weren't disclosed.

- BV Investment Partners invested in Becklar, an Ogden, Ut.-based company that owns emergency response companies Freeus and AvantGuard. Financial terms weren't disclosed.

OTHERS

- Qualcomm invested $97 million in Reliance Jio  Platforms, the top Indian telecom operator. Qualcomm’s now owns 0.15% stake in the company.

- Chatham Asset Management plans to acquire McClatchy Co., a Sacramento-based  bankrupt news publisher. Read more.

- Ares Management acquired SSG Capital Management, an Asian peer. 

- Analog Devices, Inc. (Nasdaq: ADI) agreed to acquire Maxim Integrated Products, (Nasdaq: MXIM)a Norwood, Mass-based chipmaker, in a $21 billion all-stock transaction that values the combined enterprise at over $68 billion. 

IPOs

- Marqeta, the U.S. Payment card issuing start-up, is preparing for an IPO, Reuters reports citing sources. Read more.

- Trax, a Singapore-based retail tech firm, is considering a U.S. IPO, per DealStreetAsia. Warburg Pincus, Boyu Capital, Investec, and GIC back the firm. Read more.

- Rackspace Technology, an San Antonio, Texas-based cloud hosting services provider, filed to raise $100 million in an IPO. It posted revenue of $2.4 billion in 2019 and a loss of $102.3 million. Apollo Management and Searchlight Capital back the firm. It plans to list on the Nasdaq as “RXT.” Read more.

- IBEX, a Hamilton, Bermuda-based outsourced customer support services provider, filed to raise $100 million. It posted revenue of $368.4 million and income of $11 million in the year ending June 2019. The Resource Group backs the firm. It plans to list on the Nasdaq as “IBEX.” Read more.

- Oak Street Health, a Chicago-based provider of primary care for Medicare patients in the Midwest, filed for a $100 million IPO. It posted revenue of $540 million in 2019 and a loss of $137.2 million. General Atlantic, Newlight, and Humana back the firm. It plans to list on the NYSE as “OSH.” Read more.

- Li Auto, a Beijing, China-based maker of electric SUVs, filed for an  $100 million IPO. It posted revenue of $40.2 million in 2019 and a loss of $463.1 million. It plans to list on the Nasdaq as “LI.” Read more.

EXITS

- MicroFocus acquired Atarlabs, a Turkish information security company. Atarlabs previously raised € 2.5 million in seed funding from Diffusion Capital Partners. Financial terms weren't disclosed.

F+FS

- Blackstone closed its new life sciences fund at $4.6 billion.

PEOPLE

- Bessemer Venture Partners, a venture capital firm, promoted Trevor Neff to Vice President.