16.05.2021

Robinhood Crypto Secures $280M in Series F Funding

Robinhood Markets Inc., which gained massive popularity in the stocks and crypto trading arena with its zero-commission offering, has completed its Series F funding.

Robinhood app

The Robinhood app now supports crypto trading

Equities and crypto trading company Robinhood has raised $280 million in its latest financing leg at an $8.3 billion valuation.

As per the company’s May 4th announcement, investors during the funding round helped raise $280 million with the platform valued at $8.3 billion.

The financing sees the company surpass its target of $250 million that was set earlier in the year, with the brokerage firm valued at $8 billion. The Series F funding round was led by Sequoia, with participation from 9Yards Capital, NEA, Ribbit Capital, and Unusual Ventures.

Robinhood Crypto offers commission-free trading, with traders enjoying the platform’s easy to use design. Investors have access to most major digital assets in the market, including Bitcoin, Ethereum (ETH), Bitcoin Cash (BCH) and Litecoin (LTC).

The company is getting new funding at a time it’s looking to refine its reputation following major outages that hit last month.

In March, Robinhood experienced an outage that was big enough to impact investors who missed a major rally in the Dow. The company acknowledged the drawbacks and noted that it was encouraging to see investors trust its project amidst the uncertainty of COVID-19 and unprecedented market volatility.

But despite these setbacks, the company has recorded a major upside in its revenue over the past year. Records show that the startup’s quarterly revenues grew from $20 million for the period ending March 2019 to $60 million in March 2020.

The California-based start-up makes money from its customers’ order flows as well as from paid subscriptions to its premium trading services. With over 10 million users, the platform looks to continue its push into a leading trading service. The firm has registered more than 3 million new users, many of them first-time Millennials attracted by the free trades.

Founded in 2013, Robinhood took the brokerage and trading space by storm with its stock, options, and crypto trades. Its revolutionary commission-free trading was a major disruptor, with many retail brokers, including Fidelity Investments, TD Ameritrade and Charles Schwab Corp, forced to introduce similar offerings to maintain their markets.

So far, Robinhood has raised over $900 million in financing rounds led by its investor partners. The company’s last financing round had ended with the platform valued at $7.6 billion.

Rivals Signature Bank and Prime Trust Team up to Offer Instant Payments for Institutions

Crypto banking competitors Prime Trust and Signature Bank have partnered in a bid to appeal to institutional clients.

Signature announced Monday it would be linking its Signet payments platform to Prime Trust’s multi-asset settlement platform, creating a new service offering “real-time” settlements for digital asset trades.

“Any Signature Bank commercial client participating on the Signet platform has the ability to make instantaneous payments in U.S. dollars, any time without transaction fees,” said Joseph DePaolo, Signature Bank president and CEO in a press release. “The relationship we have forged with Prime Trust will allow their clients to immediately settle their transactions through the revolutionary Signet platform.”

The service will allow institutional clients from both companies to make payments directly to one another at any time, without third parties or transaction fees.

The Signet system launched in December 2018 after winning approval from the New York State Department of Financial Services (NYDFS). It opened to Signature’s commercial clients, who need a minimum account balance of $250,000, on Jan. 1, 2019. By February, the bank already claimed to have on-boarded more than 100 clients who were sending each other millions of dollars in crypto transactions daily.

State-licensed trust company Prime Trust launched its settlement network back in July as an alternative to Signature. Having generally attracted an exchange clientele, including Bittrex and Huobi, it is the only publicly known financial services provider for Binance.US, Binance’s American partner company.

The list of banks willing to work with cryptocurrency companies remains short over compliance and risk concerns. Hence, market share is mostly concentrated in a handful of specialized providers at which competition is heating up.

Cryptocurrency exchange CEX.io, which had previously used Signature Bank, moved over to Silvergate back in November. Steve Gregory, CEX.io’s chief compliance officer and corporate counsel, told CoinDesk at the time that this was, in part, because Signature could not process retail transactions and automatically batched payments under $50,000 together.

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