Robinhood Markets Inc., the online brokerage that’s suffered repeated outages during recent market turmoil and is backed by rap superstar Jay-Z, is now close to raising new funding at a valuation of about
$8 billion.
Founded in 2013, the online brokerage is a popular mobile app and service used to purchase stocks with no extra commission fee like its competitors. According to
Bloomberg,
the Silicon Valley startup has more than 10 million users and also boasts “record revenue growth” during the coronavirus pandemic with the volatility of the markets leading to new account sign-ups. The firm had about
$60 million in revenue in March, roughly tripling from the same month last year.
Along with Jay-Z, other artists like Snoop Dogg and Nas have also invested in Robinhood.
The figure, however, is “a pre-money valuation. The company received an estimated $7.6 billion valuation after a funding round in July 2019. The online service dealt with a fair share of technical problems, outages, and maxed-out credit lines, blaming the problems on “unprecedented” user demand. An outage on March 2nd lasted for the entire U.S. trading session, during which the S&P 500 climbed 4.6%.
In a
statement, the company’s co-founders Baiju Bhatt and Vlad Tenev said they were working to mitigate similar situations in the future for smoother user functionality. “When it comes to your money, we know how important it is for you to have answers. The outages you have experienced over the last two days are not acceptable …,” the statement read. “Our team is continuing to work to improve the resilience of our infrastructure to meet the heightened load we have been experiencing. … We take our responsibility to you and your money seriously.”
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