Yesterday, commission-free stock trading app Robinhood announced a $363 million Series D funding round, valuing the company at $5.6 billion post-money. This marks one of the largest private equity financings for a U.S. fintech startup, second only to online payment giant Stripe.
Disrupting Traditional Brokerage Models
Unlike traditional brokerage firms that rely on commission fees, Robinhood has demonstrated its ability to challenge Wall Street's oldest business model. Key achievements include:
- 400,000 brokerage accounts: Surpassing E*Trade's reported 370,000 accounts
- 4x valuation growth: Rising from $1.3 billion to $5.6 billion in one year
- 200% user base expansion: Achieved within the past 12 months
DST Global led this round, with participation from new investors including Sequoia Capital, Kleiner Perkins, Iconiq Capital, and Capital G.
Product Expansion and Crypto Ambitions
Since its November 2022 launch, Robinhood has aggressively expanded its offerings:
- Web application rollout
- Commission-free options trading
- Zero-fee cryptocurrency trading (Bitcoin, Ethereum, etc.)
👉 Discover how Robinhood compares to traditional brokers
Robinhood Crypto's Rapid Growth
Launched February 2023, Robinhood Crypto currently operates in 10 U.S. states with plans for nationwide availability by year-end. The platform supports 16 cryptocurrencies versus Coinbase's 4, positioning itself as a formidable competitor to the industry-leading exchange with 20+ million accounts.
Leadership and Future Plans
Co-founder and co-CEO Baiju Bhatt attributes investor interest to the company's efficiency:
- Lean team: Under 200 employees
- Rapid product development: 3 new products in 6 months
- Strategic hiring: Plans to add technical talent and experienced executives
Frequently Asked Questions
Q: How does Robinhood make money without commissions?
A: Through premium subscriptions, interest on cash balances, and payment for order flow.
Q: Is Robinhood Crypto available worldwide?
A: Currently only available in select U.S. states with gradual expansion planned.
Q: What cryptocurrencies does Robinhood support?
A: 16 including Bitcoin, Ethereum, Litecoin, and Zcash—significantly more than Coinbase's 4.
Q: How does Robinhood's valuation compare to competitors?
A: At $5.6B, it surpasses many traditional brokers but remains smaller than Coinbase's market cap.
👉 Explore cryptocurrency trading opportunities