Robinhood Raises $323 Million in Funding at a $7.6 Billion Valuation: Term Sheet

July 23, 2019, 1:20 PM UTC
Robinhood, which offers fee-free trading of stocks and crypto, is planning to go public, says its CEO, who is hiring a CFO for the company.
Courtesy of Robinhood

No-fee investing app Robinhood confirmed that it raised $323 million in Series E funding at a $7.6 billion valuation. DST Global led the round, and was joined by investors including Ribbit Capital, NEA, Sequoia, and Thrive Capital.

It’s possible that this mega-round is just setting the stage for a much bigger round of funding that the company has discussed with a wider group of investors, which could value the company at over $10 billion, according to The Information. 

It’s unclear what it will do with the fresh funding, but it could make another attempt at better serving its millennial clientele. 

Robinhood caused a stir last December by announcing a no-fee checking-and-savings account that offered a 3% yield. Days later, however, the company walked back the announcement after regulators criticized it for offering what amounted to a bank account without FDIC insurance—a backstop that protects consumers in the event a financial institution fails.

At a panel during Fortune’s Brainstorm Tech conference earlier this month, Robinhood’s COO Gretchen Howard explained that the company is preparing to try again. “We’re going to come out with a cash management account soon,” she said. 

More broadly, Howard said Robinhood is focused on expanding its brokerage business, noting that only a quarter of millennials use a self-directed broker for investments. She added the company has also filed for a federal bank charter—a tool that would allow it to offer traditional banking products.

Robinhood has been laser-focused on aiming to become a one-stop shop for a young investor’s needs. In March, the company made its first acquisition: a millennial-focused newsletter called MarketSnacks (later re-branded as “Robinhood Snacks”). 

I’m curious to see if Robinhood makes more strategic acquisitions with all this cash — or prepares for its rumored public debut instead.

…AND MORE MEGA-FUNDING: Electric scooter company Bird is raising a Series D round led by Sequoia Capital at a $2.5 billion valuation, according to people close to the deal. TechCrunch had the initial details here.

REINING IN PRIVATE EQUITY: Leo Hindery Jr., a private equity investor and former CEO of AT&T Broadband, wrote a Fortune op-ed in which he makes the case for why his industry needs to be reined in.

Hindery says there is a practice escalating across the economy. He adds, “That practice is the unchecked and reckless overuse of heavy burdens of debt, and then of bankruptcy laws, by some private equity firms and hedge funds to the overwhelming detriment of employees and retirees.”

He goes on to make a case for Sen. Elizabeth Warren’s Stop Wall Street Looting Act, a new bill introduced this week. (Context: Her policy proposal would slap new rules on private equity and “useless speculation” on Wall Street. A centerpiece of her “economic patriotism” plan is to transform private equity firms, which she said often act like “vampires” when they buy companies by “bleeding the company dry and walking away enriched even as the company succumbs.”)

From Hindery’s column:

Today, too many PE fund managers are generalists, with little or no experience in the industry they’re investing in. And we’re seeing them use a much-discredited playbook: cut costs, take out cash for their own short-term benefit, add little genuine competitive value, and then slash jobs and worker benefits in a desperate bid for greater operating cash flow. 

This is why this week’s legislation matters so much. The aptly-named Stop Wall Street Looting Act would finally hold predatory private equity firms and hedge funds liable for the damage they cause, close tax loopholes that encourage excessive debt and let executives avoid paying their fair share of taxes, and limit the debt that predatory firms can access to seize control of companies. 

And, tremendously importantly, the bill would protect workers when employers go bankrupt, giving them added recourse to pursue the severance that is currently denied them.

Do you agree? Disagree? If you’re a private equity professional, I’d love to hear from you. Please email your comments to with the subject line “Term Sheet Response” and note that your responses may be used in a future Term Sheet. (Let me know if you’d prefer to stay anonymous.)


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