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

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.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.
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 polina.marinova@fortune.com 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.)

VENTURE DEALS

MoneyLion, a New York-based data-driven online consumer lending platform, raised $160 million in funding, including $60 million in previously unannounced funding and a $100 million Series C round. Edison Partners and Greenspring Associates co-led the round, and were joined by investors including Capital One, MetaBank and FinTech Collective.

Onecom, a UK-based business telecommunications provider, raised 100 million pounds ($124 million) in funding. Investors include LDC and Ares Management.

Heap, a San Francisco-based analytics startup, raised $55 million in Series C funding. NewView Capital led the round, and was joined by investors including DTCP, Maverick Ventures, Triangle Peak Partners, Alliance Bernstein Private Credit Investors, and Sharespost. Existing investors NEA, Menlo Ventures, Initialized Capital, and Pear VC also participated.

Homeward, an Austin, Texas-based estate startup, raised $25 million in equity and debt funding. Investors include LiveOak Venture Partners, Genesis Capital and Keystone.

Ethic Inc, a New York-based asset management platform, raised $13 million in Series A funding. Nyca Partners led the round, and was joined by investors including Fidelity Investments, Sound Ventures, ThirdStream Partners, Urban Innovation Fund and Kapor Capital.

Cognism, a London-based sales acceleration platform, raised $10 million in Series B funding. PeakSpan Capital led the round.

Weller, a Boulder, Colo.-based maker of CBD-infused food and beverage products, raised $3 million in seed funding. Brand Foundry Ventures led the round. 

Liquefy, a Hong Kong-based blockchain agnostic issuance platform for security tokens, raised $2.6 million in funding. Ideanomics and NEO Global Development led the round.

WattBuy, a Bellevue, Wash.-based energy intelligence startup, raised $1.2 million in seed funding. Investors include Powerhouse Ventures and Schmidt Futures.

Antstream Arcade, a London-based streaming platform for retro games, raised Series A funding of an undisclosed amount. Tencent led the round, and was joined by investors including Hambro Perks. 

Viviota Inc, an Austin, Texas-based engineering data software company, raised funding of an undisclosed amount from Naya Ventures.

HEALTH AND LIFE SCIENCES DEALS

Frequency Therapeutics, a Woburn, Mass-based clinical-stage biotechnology company, raised $62 million in Series C funding. Perceptive Advisors led the round, and was joined by investors including Deerfield Management, RTW Investments and Mizuho Securities Principal Investment, as well as existing investors Polaris Founders Capital, Taiwania Capital Management, Axil Capital, and CoBro Ventures.                      

Cell Vault, a Daytona Beach, Fla.-based T-cell bank, raised $1 million in funding. Bling Capital led the round.

PRIVATE EQUITY DEALS

Silver Lake Management will buy a minority stake in EverCommerce, a Denver, Colo.-based software provider, in a deal that values the company at $2 billion, according to The Wall Street Journal. Read more.

New Capital Partners made an investment in ARMCO, a Pompano Beach, Fla.-based provider of quality assurance software for the financial services industry. Financial terms weren’t disclosed. 

Cairngorm Capital acquired Millbrook, a U.K.-based provider and manufacturer of equipment, assessment services and home-based adaptations that help service users live independently at home. Financial terms weren’t disclosed. 

Yellow Wood Partners agreed to buy the Dr. Scholl’s brand from Bayer, for $585 million.

Main Capital acquired a majority stake in Optimizers, a Netherlands-based provider of software and mobile apps for the supply chain and logistics markets. Financial terms weren’t disclosed. 

Continental Services, a portfolio company of New Heritage Capital, acquired Northern Vending, an Ann Arbor, Mich.-based provider of vending services. Financial terms weren’t disclosed.

OTHER DEALS

Apple is in advanced talks to buy Intel Corp’s smartphone-modem chip business, according to The Wall Street Journal. The deal would value the business at $1 billion or more. Read more.

Compass Datacenters, which is backed by RedBird Capital Partners, Ontario Teachers’ Pension Plan, and Azrieli Group Ltd, acquired ROOT Data Center, a Canada-based wholesale data center provider. Financial terms weren’t disclosed. 

IPOs

GFL Environmental, a North American waste hauler, plans to raise $1.5 billion in a Canadian IPO, Bloomberg reports. Ontario Teachers’ Pension Plan, BC Partners, and GIC Private back the firm. Read more.

Interswitch, a Nigerian-based payments firm, has reportedly hired bankers for an IPO that could value the firm at above $1.3 billion, Bloomberg reports citing sources. Helios Investment Partners backs the firm. Read more.

Envista Holdings, a Brea, Calif.-based dental equipment provider spinning out of Danaher, filed on Monday for an $100 million IPO. On a carve-out basis, the firm posted sales of $2.8 billion and earnings of $230.7 million in 2018. It plans to list on the NYSE as “NVST.” Read more.

DNEG, a British visual effects firm that has worked on ‘Interstellar’ and ‘Avengers: Endgame’, has reportedly hired J.P. Morgan for an IPO in London this autumn, Sky News reports citing sources. Prime Focus backs the firm. Read more.

EXITS

BC Partners agreed to recapitalize Garda World Security Corporation, a Canada-based security and cash services company, in a deal valued at C$5.2 billion ($4 billion). The seller was Rhône Group.

3i Group plc agreed to acquire Evernex, a France-based provider of third-party maintenance services for data-center infrastructure and critical IT assets, from The Carlyle Group. Financial terms weren’t disclosed. 

DC Capital Partners agreed to sell QRC, a Fredericksburg, Va.-based agile, disruptive product company, from Parsons Corporation for $215 million.

PPG agreed to acquire Dexmet Corporation, a Wallingford, Conn.-based maker of specialty materials for surfaces in aerospace, automotive and industrial applications. The seller is Sverica Capital Management LP. Financial terms weren’t disclosed. 

PEOPLE

David Seider joined Weatherford Capital as a vice president.