The new round includes investors such as TSG Consumer Partners and IVP, and brings the seven-year-old online brokerage’s total fundraise to $600 million in a span of two months.
The funding round is widely being seen as a precursor to an initial public offering (IPO), according to analysts tracking the company, which has benefited from a surge in day trading, driven by consumers stuck at home during the COVID-19 pandemic.
Some traders and analysts have attributed rallies of between 300% and 500% in stocks of bankrupt or soon-to-be-bankrupt companies such as Hertz, Chesapeake, Whiting and JC Penney (OTC:JCPNQ) to retail investors using Robinhood, which has more than 10 million users.
The company, however, has been criticized for not doing enough to moderate excesses that even led to a suicide.
Last month, Robinhood said it may make it harder to qualify to do sophisticated options trading on its platform and would improve its user interface.
The Menlo Park, California-based startup has also experienced several outages since early March, particularly on days of high trading volumes.