US-based online trading platform developer Robinhood filed for an initial public offering yesterday that would score exits for internet and technology conglomerate Alphabet and entertainment group Roc Nation.
Founded in 2013, Robinhood runs Robinhood Financial, an online platform where users can but and sell stocks without a minimum investment level, in addition to Robinhood Crypto, which allows them to do the same with cryptocurrencies.
The company has set a $100m placeholder target for the offering, and sources familiar with its plans told the Financial Times it is targeting a $40bn valuation.
Robinhood has 17.7 million monthly active users and increased its revenue fourfold to $522m for the first three months of this year, a period where it recorded a $1.44bn net loss due to a $1.5bn fair value adjustment to its convertible notes and warrant liability.
The filing was published the same day US regulators levied a $70m fine on Robinhood due to “widespread and significant” harm caused to traders by technical problems on the platform at times of high volatility. It was also the centre of the widely publicised short squeeze of gaming retailer GameStop’s shares earlier this year.
Ribbit Capital led a $3.4bn equity round for the company in February this year that included Iconiq Capital, Andreessen Horowitz, Sequoia Capital, Index Ventures and New Enterprise Associates (NEA) which was closed alongside $600m in debt financing.
Robinhood had previously closed a $660m series G round led by D1 Capital Partners and backed by Andreessen Horowitz, Sequoia Capital, DST Global, Ribbit Capital and 9Yards Capital in September 2020 at an $11.7bn post-money valuation.
Alphabet subsidiary CapitalG had joined DST Global, Iconiq Capital, Sequoia, Kleiner Perkins Caufield and Byers and existing investors including Thrive Capital and NEA in a $363m series D round in May 2018 valuing Robinhood at $5.6bn, three months after it secured an undisclosed amount from Roc Nation.
Another Alphabet unit, GV, had participated in the company’s $3m seed round in 2013 alongside Greenoaks Capital, Index Ventures, Rothenberg Ventures, Queensbridge Venture Partners, Social Leverage and Vaizra Investments.
Robinhood’s overall funding stands at more than $7bn and IVP, Unusual Ventures and TSG Consumer Partners are also among its investors. Shareholders owning stakes higher than 5% include DST Global, Index Ventures, NEA and Ribbit Capital.
Goldman Sachs and JP Morgan have been appointed joint lead book-running managers for the IPO while Barclays, Citigroup and Wells Fargo Securities are active book-running managers.
