Fintech Investments

Robinhood Nearing A Valuation Of At Least $7 Billion

Robinhood Markets, the operator of a free mobile trading app, is close to garnering a valuation of $7 billion or more.

CNBC, citing two people familiar with the deal, reported Robinhood has raised a minimum of $200 million in a recent late-stage fundraising round that will give it a valuation of between $7 billion and $8 billion. The round, which includes mainly existing investors, hasn’t closed yet — which means it could raise more than $200 million. When Robinhood raised money via a Series D round it had a valuation of $5.6 billion, noted CNBC. Robinhood declined to comment on its valuation.

According to CNBC, Robinhood’s co-CEOs Baiju Bhatt and Vlad Tenev have said an initial public offering is in the cards at some point — but that currently, it is focused on disrupting other areas of finance. This year it applied for a national bank charter from the Office of the Comptroller of the Currency. A spokesman told CNBC in April that getting the national bank charter will enable it to offer banking products. “Robinhood’s goal is to be able to offer its customers a full suite of financial products to serve their needs,” the spokesman said.

CNBC noted that Robinhood brought on the CEO of Wedbush Bank and Merchants Bank of California, Scott Racusin, to head up its banking efforts. Racusin was eventually named the president and CEO of the potential bank.  Robinhood was forced to retreat from offering a bank account after announcing in late 2018 a checking and savings product with 3 percent interest.  Backlash quickly surfaced as to how the money would be insured and if it would be protected like a bank account that has the backing of the Federal Deposit Insurance Corp. Robinhood removed all its marketing material and now calls it a cash management feature offered within its brokerage accounts.

Robinhood has been enjoying fast-paced growth thanks in large part to the fact that its stock trading app is free. In 2018 its user base jumped from 4 million during the summer to 6 million by late 2018.

 

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