Thursday, the stock and cryptocurrency trading app, Robinhood, announced that it has raised an additional $363 million in funding in a recent round of investments. The new investment makes it second only to Stripe when it comes to highest valued private fintech start-ups in the U.S.
The platform’s claim to fame is its fee-free trading, and over its first three years of existence it has passed industry giant E*Trade in total users, reaching the 4 million mark as of this year.
Three new product launches last year — a web version of the Robinhood app, commission-free options trading, and the Robinhood Crypto platform — contributed to the surge of users, and helped the company’s valuation more than quadruple from the $1.3 billion it was valued at after its last fundraising round a year ago.
“I think the real ‘X factor’ that made investors even more excited about being a part of Robinhood was seeing our ability to, with a very, very limited workforce, to ship three brand new products in these last six months, while maintaining and growing one of the largest brokerages in the U.S.,” said Robinhood’s co-founder and co-CEO, Baiju Bhatt.
Robinhood Crypto is already growing in popularity, but its slow launch in many states is keeping its growth in check. As of now, the exchange is only available to residents in 10 U.S. states, although there are hopes to be open in all 50 by the end of the year.
“We expect by the end of the year to be either the largest or one of the largest crypto platforms out there,” says Bhatt.
The amount of cryptocurrency and the no-fee acquisition of coins can certainly give it a boost vs its largest competitor in the U.S., Coinbase. While Coinbase has only four cryptocurrencies offered and no public plans for future expansion, Robinhood has 16 coins it allows users to monitor, and hopes to open trading involving all 16 in the near future.
Bhatt believes Robinhood can “unquestionably” achieve its goal to become the leader in cryptocurrency trading despite reports over the past week that major Wall Street institutions, including Goldman Sachs and the parent company of the New York Stock Exchange plan to enter the Bitcoin trading market.
