The free stock trading app, Robinhood, announced on Thursday that it has raised USD 363 million in a new investment round, reports Fortune.
This makes the company the second most valuable private fintech startup in the US after online payments company Stripe, valuing it at USD 5.6 billion. Fortune reports that Robinhood has shown an ability to rapidly overtake incumbents in one of the oldest Wall Street industries after its valuation has quadrupled in the last year.
Growth has largely been driven by new product launches and commission-free trading. The new funding will allow the company to expand its workforce from barely 200 employees, and hire more experienced executives and technical talent.
Baiju Bhatt, Robinhood’s co-founder, explained why the company experienced such a rapid rise in after only three years of operation:
“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 US”
Robinhood Crypto, which launched in February, is expected to be rolled out throughout the US by the end of 2018 and could become a viable challenge to US giant Coinbase, according to Bhatt. It is currently only available in 10 states around the US.
“We expect by the end of the year to be either the largest or one of the largest crypto platforms out there, but we also really feel we’ll have the absolute best experience for investing in crypto as well — from having a large variety of coins available to a more favorable cost structure — mainly no commissions — to just quality of product.”
Robinhood plans to bring on board other currencies in order to make the challenge to Coinbase, which lists only four cryptocurrencies on its exchange: Bitcoin, Bitcoin Cash, Ethereum and Litecoin. Robinhood currently only offers trading of Bitcoin and Ethereum, but also allows its users to track market data for 16 different cryptocurrencies, including Ripple and Zcash.
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