Robinhood revealed the increase in fundraising after the online brokerage removed trading restrictions it had imposed amid the market frenzy fueled by Reddit last week.
Robinhood Markets announced Monday that it has raised an additional $ 2.4 billion from existing shareholders, on top of the $ billion it took last week.
The latest round of funding was led by Ribbit Capital and also includes Iconiq Capital, Andreessen Horowitz, Sequoia Capital, Index Ventures and NEA, Robinhood said in a blog post.
“This round of funding will help us scale to meet the incredible growth we’ve seen and demand for our platform,” CFO Jason Warnick said in the post.
Robinhood disclosed the fundraiser after the online brokerage firm pulled back from trading restrictions imposed following the market frenzy fueled by Reddit last week. But as the uproar entered a second week, that didn’t quell customer suspicions about the company’s motives.
CEO Vlad Tenev has attempted in public appearances – including with Elon Musk – to explain why Robinhood halted trading in popular stocks, including GameStop Corp. This was not enough for many customers. Despite the easing of trading limits – reducing the number of securities affected on Sunday to eight from 50 – some of its more than 13 million users are angry that they have been limited.
Venture capitalists are key stakeholders in Robinhood, having helped bring its valuation to around $ 11.7 billion in a funding round in September.
The latest round, following last week’s emergency infusion, suggests its initial public offering is on the line.
The current turmoil could delay Robinhood’s IPO, which is slated for May, a person familiar with the matter said. True to its mission, the trading platform had envisioned an unusually retail investor-centric offer by awarding a significant minority of listed shares to clients, Bloomberg reported in January. No final decision on this plan had been taken at the time.
The latest fundraiser was reported earlier by the Wall Street Journal.