Robinhood, the controversial Silicon Valley on-line dealer, has raised another $2.4 billion from shareholders barely days after present investors pumped in $1 billion into the web brokerage.
The $3.4 billion in mixed whole funding obtained inside days is greater than the corporate has raised because it was established 8 years in the past.
“At this moment, we are witnessing a massive transformation across the financial markets. The intersection of technology, democracy and finance is ushering in an entirely new era of financial participation”, the corporate stated in a blog post on Monday.
The large infusion will assist Robinhood cowl a surge in collateral necessities stemming from a spike in commerce volumes, the Wall Street Journal reported.
Last week, prospects comprising of younger investors, celebrities and politicians, flooded Robinhood and different brokerages with orders to purchase and promote a handful of standard shares. The video-game retailer, GameStop topped the record of orders, closing at $325 on Friday. At the identical interval final 12 months, GameStop traded at solely $4 per share. It started this 12 months at below $20 earlier than the sudden spike reaching a document $413.98 as merchants on Reddit’s “WallStreetBets” subreddit continued to push it up as their golden goose.
The battered movie-theater chain, AMC Entertainment Holdings Inc., additionally went up final month by greater than 500%.
Robinhood permits its prospects to make limitless commission-free trades in shares, exchange-traded funds, choices and cryptocurrencies on its platform.
The sudden and surprising surge prompted the clearinghouse that processes and settles the trades to ask for more cash to cover potential losses on the transactions.
Sequoia Capital and Ribbit Capital raised $1 billion for the corporate final week, in response to the New York Times.
Robinhood stated on Monday the newest funding was led by Ribbit Capital, with participation from present investors together with ICONIQ Capital, Andreessen Horowitz, Sequoia, Index Ventures and NEA.
The California-based firm which was based in 2013 by Baiju Bhatt and Tenev, has confronted some criticisms from regulators about the way it operates.