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With a scholarship, Robinhood can raise fresh capital and get funding.
AFP via Getty Images
Robinhood Markets, the trading app that was scrutinized for
GameStop
trade, going forward with plans to become public, said four bankers and venture capitalists.
Three of the people say the IPO plans of the startup are underway and an offer is expected in the next few months, probably in the second quarter.
“The [Robinhood] IPO is in full swing, “said one of the bankers.
Goldman Sachs
One of the people said: a ticket: GS) gives advice on the offer.
According to a stock exchange, Robinhood would raise fresh capital, while the company, once it was public, would gain access to financing. Robinhood was forced to raise $ 3.4 billion last week after a merchant van forced the trading platform to bolster the money he deposits with the clearing houses that process his trade.
Managers for Robinhood and Goldman declined to comment.
Founded in 2013, PitchBook offers commission-free trading in stocks, ETFs, options and cryptocurrencies, as well as margin. The company sends customer orders to marketers such as Citadel Securities, Virtu Americas and G1X Execution Services. It had 1,281 employees in 2020.
Robinhood said on Monday that he had added another $ 2.4 billion in a round led by
Ribbit Capital.
The financing came after the company raised $ 1 billion from current investors last week.
The company Menlo Park, California, came under pressure after Robinhood restricted trading in GameStop (ticker: GME) and other shares. The move has sparked outrage among its customers, investors and on Wall Street. Even Representative Alexandria Ocasio-Cortez (DN.Y.), and other legislators, wrote
Twitter
that Congress should look deeper into the actions of Robinhood.
According to Robinhood, Robinhood attempted to explain his actions, claiming that the clearinghouse requirement required the company to trade in order to restrict trading in certain shares. The company said the clearinghouse’s deposit requirements had risen to ten times the normal number, and Robinhood “had to take steps to limit the purchase of the volatile bonds to ensure we could comfortably meet our requirements.”
The anger over Robinhood’s tactics did not dampen its popularity. The app was downloaded more than one million times last week. As a result, one hedge fund CEO said Robinhood’s stock market was likely to remain a winner. “If they have growing users and have a plan to address the PFOF issues with Citadel, I think they can still be revealed with some Twitter haters out there,” the CEO said.
PFOF refers to payment for order flow. Trades on Robinhood are sold to market makers, or large companies like Citadel.
A message will leave Robinhood investors. These include D1 Capital Partners, Sequoia Capital, NEA, 9 Yards Capital and Unusual Ventures. Some of Robinhood’s earliest supporters, such as Index Ventures, Draper Associates and Andreessen Horowitz, participated in the company’s $ 3 million seed round in 2013.
Index Ventures and Draper declined to comment. Ribbit, Sequoia, NEA, 9 Yards and Andreessen did not return messages for comment.
Write to Luisa Beltran at [email protected]