GameStop won’t stop Robinhood from launching its IPO bid

We’re only two months into 2021, but for better and for worse, it’s already shaping up as Robinhood’s year to remember. After fully breaking into mainstream consciousness with the ongoing GameStop fiasco, the stock-trading app is reportedly on track for a confidential IPO filing as soon as this month, Bloomberg reported on Friday evening.

While Robinhood has been eyeing an IPO for some time, the GameStop saga cast doubts over whether the online broker would manage to land on the public markets anytime soon. After becoming the preferred vehicle through which r/wallstreetbets wreaked havoc, Robinhood’s controversial response to the GME short squeeze opened a can of worms—one that’s already yielded a congressional hearing, shone a harsh light on the broker’s business model, and triggered numerous lawsuits and investigations from regulators, prosecutors, and investors.

It’s easy to see how opening the books and laying the company bare to the world in an S-1 could be an unpalatable prospect for Robinhood and its underwriters right now. From an optics standpoint, a Coins2Day-Civis Analytics survey found that the GameStop situation has severely damaged Robinhood’s brand, with more than half of account holders saying that they were considering leaving the platform.

What’s more, Robinhood’s past and present dealings have raised ample questions about the company’s internal practices and governance. This is the same company that had to backtrack on its ill-fated foray into bank accounts in 2018 because it didn’t have the requisite clearance from federal regulators, and whose own CEO doesn’t even hold a FINRA brokerage license. Who knows what else a prospectus would reveal about finances that showed signs of strain during the GameStop debacle.

Still, they say that investors love a good story—and Robinhood’s remains a compelling one. The company is estimated to have gained 3 million users in January alone, with GameStop only bolstering its already formidable brand recognition. Robinhood was valued at $11.7 billion after its most recent private funding round last year, and an IPO would allow the company to convert billions of dollars in debt that it has raised—including emergency capital tapped during the short squeeze—into equity for those investors, according to Bloomberg.

Who knows what else 2021 will have in store—for Robinhood, the capital markets at large, or any of us for that matter. But your favorite millennial stock-trading app seems intent on rolling with the punches.

Rey Mashayekhi
Twitter: @reym12
Email: [email protected]

Anne Sraders curated today’s Term Sheet.

VENTURE DEALS

-Klarna, a Sweden-based payments platform that lets users buy now and pay later, raised $1 billion in funding at a $31 billion valuation. Read more. 

-Stripe, the San Francisco-based payments processing fintech, is reportedly in the process of raising between $1 billion and $5 billion in financing for a valuation of over $100 billion, Barron’s reported citing sources. Read more.

-Loggi, a Brazil-based delivery company, raised 1.15 billion reais ($205 million) in funding. CapSur Capital led the round, and was joined by investors including Monashees, Softbank Group Corp, GGV, Microsoft Corp and Sunley House. 

-Skydio, a Redwood City, Calif.-based drone maker, raised $171 million. Andreessen Horowitz led the round, and was joined by investors including Linse Capital, Next47, IVP, and UP.Partners. Read more.

-FogPharma, a Cambridge, Mass.-based biopharma, raised $107 million in Series C funding. VenBio Partners led the round, and was joined by investors including Cormorant Asset Management, Farallon Capital Management, Invus, funds advised by T. Rowe Price, HBM Healthcare Investments, Casdin Capital, PagsGroup, GV, 6 Dimensions Capital, Deerfield Management, and Blue Pool Capital. 

-Tenaya Therapeutics, a South San Francisco-based biotech focusing on treating heart disease, raised $106 million in Series C funding. RTW Investments, RA Capital Management, Fidelity Management & Research Company, and funds advised by T. Rowe Price Associates led the round, and were joined by investors including The Column Group, Casdin Capital, and GV. 

-Axonius, a New York-based cybersecurity management platform, raised $100 million in funding led by Stripes. Read more. 

-Carisma Therapeutics, a Philadelphia-based biopharmaceutical company developing cell therapies, raised $59 million in extended Series B funding, from investors including IP Group, Penn Medicine, and 4BIO Capital. Initial investors in the round include SymBiosis II, Solasta Ventures, Livzon Pharmaceuticals Group, AbbVie Ventures, HealthCap, Wellington Partners, TPG Biotech, Agent Capital and MRL Ventures Fund.

-Dream Games, an Istanbul-based digital gaming developer, raised $50 million in Series A funding. Index Ventures led the round, and was joined by investors including Balderton Capital and Makers Fund. 

-Oxular, an Oxford, England-based company developing therapeutics for retinal disease, raised £27 million ($37 million) in funding. Forbion led the round, and was joined by investors including IP Group, NeoMed, and V-Bio Ventures. 

-Employment Hero, an Australia-based HR software developer, raised AU$45million ($35 million) in Series D funding. SEEK led the round, and was joined by investors including OneVentures, AirTree Ventures and Salesforce Ventures. 

-Stori, a Mexico City-based credit card company, raised $32.5 million in Series B funding. Lightspeed Venture Partners led the round, and was joined by investors including Vision Plus Capital, BAI Capital and Source Code Capital. 

-NIL Technology, a Denmark-based nanotech company focused on optical components, raised €26 million ( $31 million) in funding. Jolt Capital, NGP Capital and Vækstfonden led the round, and were joined by the European Commission fund. 

-Gitai, a Japan-based space robotics maker, raised $17.1 million in Series B funding. SPARX Innovation led the round, and was joined by investors including DcI Venture Growth Fund, Dai-ichi Life Insurance Company, and EP-GB, the investment fund by Global Brain and Epson X Investment Corporation. Read more.

-HYAS, a Canada-based cybersecurity company, raised $16 million USD. S3 Ventures led the round, and was joined by investors including Uncorrelated Ventures, Tightline Holdings, Cyber Mentor Fund, Dcode Capital, M12, Startup Capital Ventures and 205 Capital. 

-Stoke Space, a Renton, Wash.-based company making rockets and other space vehicle components, raised $9.1 million in seed funding. NFX and MaC VC led the round, and were joined by investors including YC, Seven Seven Six and Liquid2 Ventures.

-Rollick, an Austin, Texas-based marketing and technology provider for RV and boat dealers and manufacturers, raised $8.5 million in funding from investors including Sandbox Insurtech Ventures, TechNexus Venture Collaborative, Dallas Venture Capital, Alumni Ventures, London Technology Club, LiveOak Venture Partners, Silverton Partners, Autotech Ventures, ManchesterStory, Anthem Venture Partners, and Capital Factory.

PRIVATE EQUITY

-TPG will acquire a 30% stake in a spin out of AT&T’s DirecTV, AT&T TV and U-Verse businesses valued at $16.3 billion. Read more.

-Cerberus Capital and Koch Minerals & Trading have agreed to acquire the performance chemical business of PQ Group Holdings, a Malvern, Pa.-based chemicals and refining services provider, for $1.1 billion. 

-Twilio agreed to invest up to $750 million in Syniverse Technologies, a Tampa, Fla.-based telecommunications company owned by Carlyle Group. Read more. 

-ARX Equity Partners agreed to acquire Instrumentation Technologies (I-Tech), a Slovenia-based instrument maker used for particle acceleration and proton therapy. Financial terms weren’t disclosed. 

EXITS

-United Arab Emirates’s Amanat Holdings PJSC acquired Cambridge Medical and Rehabilitation Center, an Abu Dhabi-based rehab center, from TVM Capital Healthcare for $232 million in enterprise value. Read more.  

-The Sterling Group acquired Merchants Metals, an Atlanta, Ga.-based fence maker, from Atlas Holdings. Financial terms weren’t disclosed. 

-Ontario Teachers’ Pension Plan Board will acquire a majority stake in Logoplaste, a Portugal-based plastic containers maker, from Carlyle Group. Financial terms weren’t disclosed.

OTHER

-CAE agreed to acquire the military training unit of L3Harris Technologies, a Melbourne, Fla.-based aerospace and defense technologies contractor, for $1.05 billion. 

-AstraZeneca sold its 7.7% stake in Moderna, the Cambridge, Mass.-based biotech who is one of the makers of a coronavirus vaccine, for over $1 billion, per The Times. Read more. 

-Maximus (NYSE: MMS) acquired the Federal division of Attain, a McLean, Va.-based federal technology and management consulting firm, for $430 million. 

-Beacon Pointe Advisors acquired Wealth Design, a San Jose, Calif.-based RIA. Financial terms weren’t disclosed. 

IPO

-SentinelOne, a Mountain View, Calif.-based cybersecurity firm, is reportedly getting ready for an IPO that could value the company at over $10 billion, Bloomberg reported citing sources. Read more

-Robinhood, the popular trading platform, is reportedly planning to confidentially file for an IPO within weeks, per Bloomberg. Read more. 

-Tuya, a China-based IoT cloud platform, filed to raise up to $100 million in an IPO. The company had $180 million in revenues and $67 million in net losses for 2020. Read more. 

-Leonardo DRS, an Italy-based defense technology provider, filed to raise up to $100 million in an IPO to spin out of Leonardo. The company had $2.8 billion in revenues in 2020. Read more. 

SPAC

-Rocket Lab, a Long Beach, Calif.-based rocket launcher company, agreed to go public with Vector Acquisition Corp., valuing the company at an enterprise value of $4.1 billion. 

-RMG Acquisition VII, a SPAC from Riverside Management Group’s James Carpenter and formerly Carlyle Group’s Robert Mancini, filed to raise $725 million. Read more.

-RMG Acquisition V, the fifth SPAC from Riverside Management Group’s James Carpenter and formerly Carlyle Group’s Robert Mancini, filed to raise $425 million. Read more. 

-Big Sky Growth Partners, a SPAC from former Zulily and Blue Nile co-founder Mark Vadon, filed to raise $300 million. Read more. 

-BYTE Acquisition, a SPAC seeking an Israeli tech company, filed to raise $300 million. Read more. 

-Tiga Acquisition III, the third SPAC by Tiga Investments, filed to raise $300 million. Read more.

-RMG Acquisition IV, the fourth SPAC from Riverside Management Group’s James Carpenter and formerly Carlyle Group’s Robert Mancini, filed to raise $275 million. Read more. 

-Cornerstone Investment Capital Holdings, a SPAC from Cornerstone Investment Capital, filed to raise $250 million. Read more. 

-HCM Acquisition, a SPAC from Hondius Capital Management, filed to raise $250 million. Read more.

-Tiga Acquisition II, Tiga Investments’ second SPAC, filed to raise $200 million. Read more. 

-Avalon Acquisition, a SPAC from financial services executives including Putnam Lovell Securities founder Donald Putnam,  filed to raise $200 million. Read more. 

-FAST Acquisition II, the third SPAC from Ruby Tuesday’s founder Sandy Beall, filed to raise $200 million. Read more. 

-Build Acquisition, a SPAC by BuildGroup, filed to raise $200 million. Read more. 

-Blueprint Health Merger Corp, a SPAC by Casper co-founder Neil Parikh, Virgin Pulse’s Dr. Rajiv Kumar, and the cofounders of Blueprint Health incubator, filed to raise $200 million. Read more.  

F+FS

-Founder’s Co-op, a Seattle-based seed-stage venture fund, raised $50 million for its fifth fund. 

-JMI Equity, a Baltimore and San Diego-based growth equity firm, raised $1.7 billion for its fund JMI Equity Fund X. 

PEOPLE

-Tech Square Ventures, an Atlanta-based venture firm, added Vasant Kamath as a partner.

-Storm Ventures, a Menlo Park, Calif.-based early stage venture firm, promoted Pascale Diaine and Frederik Groce to partners. Read more. 

-The Halifax Group, a Washington, D.C.-based private equity firm, added Molly Fitzpatrick as a vice president.