Free stock-trading start-up Robinhood is now valued at $7.6 billion after closing its most recent, late-stage funding round.
The Menlo Park, California-based company, which offers commission-free stock and cryptocurrency trading, announced a $323 million Series E round led by DST Global on Monday. Other well-known venture capital firms NEA, Sequoia, Thrive Capital, DST Global, and Ribbit Capital also participated.
People familiar with the deal told CNBC in May that the company had been in the process of raising at least $200 million, putting its valuation between $7 billion and $8 billion.
The six-year-old company — mostly used by millennials —said the new cash injection would go towards “pursuing our mission of democratizing finance for all.”
Robinhood made headlines after the botched launch of what it called a checking and savings account with a 3% interest rate in December. A day later, the digital brokerage firm announced it would re-launch and re-name the product. It caught the attention of U.S. senators in the process, who said they were “concerned” that Robinhood and other fintech companies may be dodging regulatory scrutiny. A Robinhood spokeswoman told CNBC it still plans to offer customers a cash management feature within brokerage accounts.
The company first shook up the brokerage space in 2013 with commission-free trading. Major incumbents like Charles Schwab and Fidelity have battled for lower fees since. The start-up is stepping even further into traditional finance and earlier this year, submitted an application to the Office of the Comptroller of the Currency, or OCC, for a national bank charter. Robinhood hired the former CEO Wedbush Bank and Merchants Bank of California, Scott Racusin, to oversee the project and eventually be president and CEO of the proposed bank.
Robinhood went through an eye-popping growth spurt last year. It jumped from 4 million users in the summer to more than 6 million users by the end of 2018. Founders and co-CEOs, Baiju Bhatt and Vlad Tenev, have repeatedly said Robinhood’s long-term strategy involves public listing.