Stock trading app Robinhood has raised $3.4 billion to deal with record customer growth, including $1 billion in funding announced on January 29. The app is popular among younger and new customers looking to trade stocks and options.
The urgent fundraising round was led by Ribbit Capital, with participation from existing investors including ICONIQ Capital, Andreessen Horowitz, Sequoia, Index Ventures, and NEA
The Robinhood service has seen a surge in new users due to Reddit boards promoting Gamestop and other heavily-shorted stocks as investments.
Robinhood initially blocked trading of new shares in Gamestop and several other stocks due to an increase in capital required by its clearinghouse, which the company said increased tenfold.
As of last week, restrictions on trading Gamestop and other companies has been removed.
Robinhood helped pioneer no-cost trading of stocks and options, forcing major brokerages such as Schwab, E-Trade and TD Ameritrade to also go commission-free in 2019.
In December, Robinhood dropped the interest rate on margin trades from 5% to 2.5%, one of the lowest-rates in the industry.