Turns out robbing from the rich and giving to the poor can make the robber pretty darned rich, if your name is Robinhood. The three year old free trading platform has absolutely exploded in valuation with its latest funding round to an eye-popping $5.6B, one third the market capitalization of the leader of the trading platform pack, e*trade. That’s how quickly things can move in the fintech space, folks. Watch for this one to continue growing.
“Robinhood Markets Inc. is set to be valued at about $5.6 billion in a new funding round, according to people familiar with the matter, a fourfold increase in just one year that reflects the stock-trading app’s soaring popularity among millennials.
The Silicon Valley startup is in the final stages of securing around $350 million from a group of investors led by Russian firm DST Global, according to the people familiar with the fundraising…
The exploding valuation puts Robinhood among the top 15 highest-valued private technology companies in the U.S., representing an ambitious bet by investors that the firm can capture a sizable piece of the financial-trading market.
As of last year, the median age of Robinhood’s users was around 30, meaning they are less likely to have ample cash in spare accounts to spend compared with older clients at big brokerages. The company is banking that the younger investors’ assets will grow over time, and that it will be able to sell them additional services. Robinhood has sought to keep costs low by shunning marketing and reducing overhead…”
Source: WSJ (paywall may apply)