Robinhood invested another $ 200,000, now the company is worth $ 11.2 billion.
Robinhood startup announced another major cash infusion
Thanks to another $ 200 million, the estimated value of the company will grow from $ 8.6 to $ 11.2 billion
Venture Capital Inflows Accelerated Amid Rapid Growth Of Trading App
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In June, Robinhood’s average profit per day reached $ 4.3 million, bypassing all listed brokers.
Venture capitalists have high hopes for Robinhood this year as people stranded at home by the pandemic, especially young investors, decided to take up trading in the stock market that has seen the fastest recession and recovery in Wall Street history..
In July, Robinhood completed another round of funding, which raised the company’s appraisal value to $ 8.6 billion.
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Within a month, the team received a new sponsor, CNBC reported. It was the New York-based company D1 Partners, which joined such large Robinhood investors as Sequoia, Kleiner Perkins and Google’s venture capital arm, GV..
A feast during a pandemic
Startup investments are growing amid historical events in the US stock market and the rise of brokerage firms. Robinhood and its competitors such as TD Ameritrade, Charles Schwab and E-Trade achieved record growth in client accounts in 2020, fueled by new traders’ interest in stocks from retailers such as Tesla and Virgin Galactic. After the formation of the bear market in March, the S index&The P 500 is again close to the record high recorded on February 19.
According to the company, Robinhood’s average daily profit from transactions in the second quarter more than doubled from the previous three months. At the beginning of 2020, 3 million new client accounts were also opened.
Robinhood’s profits grew along with the trading volume. According to a recent report provided by the SEC, the startup has nearly doubled the amount it earns from deals with clients compared to the previous quarter. Most of this money comes from options trading..
The current success is also fraught with difficulties. In March, Robinhood suspended operations for several days, resulting in some clients being unable to trade on the historic day for the markets. According to the company, this is, in particular, due to the record trading volume and volatility. Another failure occurred in June. At that time, startup traders were also left without access to the market. The startup also made it difficult to access options after a client’s suicide.
Along with the boom in trade, Robinhood noted that “people are trying to learn more about the markets.” At the same time, the number of daily visits to the company’s educational resources related to the basics of investing has increased by more than 250% since January..
The California-based startup supports stock, cryptocurrency and options trading, as well as money management accounts. The average age of clients is 31 years. Most trades are free, while Robinhood makes money through customer order flow and paid subscription services. However, the company declined to say whether it was profitable or not..
Robinhood said the latest round of funding will focus on investing in a core product and improving “customer experience.”.
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