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Robinhood raising funds at $8bn valuation

Robinhood raising funds at $8bn valuation

Robinhood is closing in on a funding round worth between $200 million and $250 million, valuing the stock trading app at $8 billion, according to press reports.

Sequoia Capital is leading the raise, which is not finalised, according to Bloomberg and CNBC, both of which cite sources.

The $8 billion figure, which is a pre-money valuation, is up on the $7.6 billion assigned to Robinhood when it closed a $323 million funding round last July.

With traditional retail brokerages such as E*Trade charging fees of anything up to $10 a trade, Robinhood has attracted strong interest for its apps since launching in 2015 and now claims more than 10 million users.

In recent weeks it has seen record revenue growth, with investors keen to take advantage of market volatility during the Covid-19 pandemic.

However, the increased demand has put strain on Robinhood's systems, with the app experiencing several outages. The company has promised to compensate investors affected by outages on a case-by-case basis. However, at least one person has already filed a lawsuit.

Late last year the startup withdrew its bank charter application with the Office of the Comptroller of the Currency.

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