Online trading maverick firm Robinhood, whose clients have shaken up the world of Wall Street over the past week with targeted buys of heavily shorted US stocks, has announced that it has raised $3.4 billion to continue to invest in record customer growth.
The $3.4 billion figures includes $1 billion in funding already announced on January 29. Robinhood scrambled to raise the $1 billion from existing investors last week, after a surge of trading activity from its clients in heavily shorted names such as GameStop and AMC Entertainment led to sharply rising costs of execution and settlement, as Robinhood became a victim of its own success.
The financing round was led by Ribbit Capital, with participation from existing investors including ICONIQ, Andreessen Horowitz, Sequoia, Index Ventures, and NEA with terms being finalized.
The company said that this funding is a strong sign of confidence from investors and will help it build for the future and continue to serve people through the exponential growth it has seen this year.
Robinhood stated that it is witnessing a movement of everyday people taking control of their own financial futures, many investing for the first time through Robinhood. With this funding, the company said it will build and enhance its products that give more people access to the financial system.
The company noted that it will also continue to invest in expanding access to financial literacy in service of its mission to democratize finance for all.
“Robinhood has served millions of people who have felt left behind by America’s financial system. We’re confident that Robinhood will emerge stronger through this phase of growth and unprecedented demand,” said Micky Malka, Managing Partner, Ribbit Capital.
“This round of funding will help us scale to meet the incredible growth we’ve 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,” said Jason Warnick, CFO, Robinhood.