Robinhood snags third mega-investment of the year, boosting valuation to $11.2 billion

Venture capital investors are betting big on Robinhood during this pandemic-plagued year as people stuck at home, signally younger investors, jump into trading a stock market that’s experienced its fastest bear market and convalescence in Wall Street history.

The trading start-up announced a $200 million, Series G funding round on Monday — its third pre-eminent investment in just five months. The new cash injection boosts Robinhood’s valuation to $11.2 billion, an increase of scarcely $3 billion. 

The latest investment comes from a new backer, New York-based D1 Partners, just a month after Robinhood disregard a close another late-stage round. In July, Robinhood said it was adding $320 million investment to a prior series of funding, which had been advertised in April. That had boosted its valuation to $8.6 billion. D1 joins high-profile Robinhood investors such as Sequoia, Kleiner Perkins and Google’s broach capital arm, GV.

The flurry of venture capital cash comes in a historic year for the U.S. stock market and a high-growth period for brokerage organizations. Robinhood and its publicly traded peers, such as TD Ameritrade, Charles Schwab and E-Trade, have seen record person account growth in 2020, helped by new traders’ enthusiasm for retail stocks such as Tesla and Virgin Galactic. After come ining a bear market in March, the S&P 500 was back within striking distance of its Feb. 19 record high this week.

Robinhood state it saw 4.3 million daily average revenue trades, or DARTs, in June, outperforming all of the publicly traded, incumbent middlemen. Robinhood’s DARTs in the second quarter more than doubled compared to the prior three months, according to the cast. It also added 3 million new customer accounts in the beginning of 2020. 

Robinhood’s revenue has surged alongside trading volume. It violently doubled the money it makes from customer trades from the prior quarter, according to a recent SEC regulatory submitting. The majority of that total came from options trading. 

This year’s success has also brought originating pains. Robinhood saw multiple days of outages in March, leaving some clients unable to trade during a great day for the markets. It attributed those, in part, to record trading volume and volatility. The start-up also made it more obscure to get access to its options offering in the wake of a customer’s suicide.

Along with the trading boom, Robinhood said on Monday they are take care evidence “people are taking time to learn more about the markets” with average unique daily stops to the company’s education resources on the basics of investing up more than 250% since January. 

The Menlo Park, California-based start-up proposals equity, cryptocurrency and options trading, as well as a cash management accounts. Robinhood offers most trades for bountiful and makes money off of customer order flow and a premium, paid subscription service, but declined to say if it was profitable. Its average shopper age is 31.

Robinhood said the latest round of funding would go towards investing in its core product, and “customer experience.”