It’s not been an easy 24 hours for Robinhood.
Massachusetts security regulators on Thursday looked to effectively ban the startup in the state by revoking its broker-dealer license. The investing app also suffered a major outage in its crypto-trading platform early in the day, as the infamous meme Dogecoin surged.
Officials in Massachusetts have previously said that the startup failed to protect consumers on its platform, “aggressively inducing and enticing trading among its customers.” Robinhood on its part hit back, saying: “We don’t believe our customers are naive as the Massachusetts Securities Division paints them to be,” and “the complaint reflects the old way of thinking.”
The crypto-trading issue did resolve about two hours after Robinhood announced that it had been made aware of the issue—but the issue appeared again early Friday.
And yet, despite these stumbles, Robinhood continued its ascent. As CEO Vlad Tenev highlighted on Twitter Friday, the app remains the most downloaded on Apple’s app store, above that of Coinbase and TikTok.
This story has played itself out a few times now. Near the start of the pandemic, Robinhood crashed, leading some users to miss a lucrative trading day. This January, the company also briefly paused the trading of shares in GameStop, fanning unproven conspiracy theories of market manipulation. Meanwhile Congress appears set on some kind of penalty against the startup. But the public outcry aside—or perhaps fueled by the public outcry?—Robinhood appeared to be chugging along just fine after each case.
RELIGION IN VENTURE CAPITAL: An uncommon corner of venture capital has been gaining followers—religion tech. Hallow, a Catholic prayer and meditation app, raised about $12 million in Series A funding with General Catalyst leading the round. The company says it experienced a seven times increase in downloads since the start of the pandemic. That comes as funding in the space still remains piecemeal overall, but has grown in recent years to $18.2 million in 2019.
P.S. Speaking of Robinhood, investors have now undeniably changed the way they value stocks. I caught up with fintech investor Frank Rotman over at QED Investors (Credit Karma, Prosper, and SoFi) about what these new behaviors could mean for the broader market. I also asked him whether he wishes Credit Karma had waited a smidgen longer before combining with tax prep software company Intuit in February of 2020—just before the valuations of other financial tech startups shot up. Read for his answer.
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