U.S. fintech Robinhood announced on Monday it secured $280 million through its Series F funding round, which was led by Sequoia Capital with participation from existing and new investors, including NEA, Ribbit Capital, 9Yards Capital, and Unusual Ventures. Founded in 2013, Robinhood stated it is on a mission is to democratize the finance for all. The company noted it believes it should work for everyone and not just a few by offering commission-free trading in one, user-friendly platform.
Robinhood further reported that amid the current challenging times and market volatility, it is humble that people are turning to the fintech’s service to participate in the markets and build their financial futures.
“We added more than three million funded accounts so far this year, and we’re grateful for the opportunity to serve each customer. We’re also proud to have built a platform that empowers people: Half of new Robinhood customers this year were first-time investors.”
Speaking about the investment, Andrew Reed, Partner at Sequoia, stated:
“Robinhood has made the financial markets accessible to the masses, and in turn, revolutionized the decades-old brokerage industry. We’re excited to further our relationship with Robinhood, which we believe is at the beginning of its opportunity.”
The investment does come less than two months after Robinhood’s software experienced performance issues and outrages. This was notably during a historic market rout as a combination of COVID-19 hysteria and a dramatic plunge in the oil market occurred. Services were restored in several steps with all services being back up and running within a matter of hours. Fintech messaged in a blog post following the previous outages that its apparent popularity was part of the cause:
“Multiple factors contributed to the unprecedented load that ultimately led to the outages. The factors included, among others, highly volatile and historic market conditions; record volume; and record account sign-ups.”
At the time, Robinhood said it would compensate investors who may have been impacted by these outages on a case-by-case basis. The company also experienced some issues at the end of 2019, with being fined $1.25 million by FINRA for best execution violations related to its customers’ equity orders and related supervisory failures that spanned from October 2016 to November 2017. Robinhood also withdrew its bank charter application, which was filed with the Office of the Comptroller of the Currency.