(Bloomberg) -- Robinhood Markets Inc., the online brokerage that’s suffered repeated outages during recent market turmoil, is close to raising new funding at a valuation of about $8 billion, according to people familiar with the matter.
The Menlo Park, California-based startup is raising about $250 million from investors led by Sequoia Capital, said the people, who asked not to be identified because the details are private. The company was most recently pegged to be worth $7.6 billion after a round of funding that closed in July. The new $8 billion figure is a pre-money valuation, the people said, meaning it refers to the value assigned to the company before the latest round of funds is received.
A final deal hasn’t been reached and might not be, the people said. Representatives for Robinhood and Sequoia declined to comment.
Robinhood has blamed frantic trading and record new account sign-ups for the technical problems that plagued its platform earlier this year. One outage on March 2 lasted for the entire U.S. trading session, during which the S&P 500 climbed 4.6%.
The company said in a statement in March that it was learning from its mistakes and was focused on continuing to improve the stability of its service and overall customer experience.
Robinhood has seen record revenue growth during the coronavirus pandemic, the people said. The volatility of the markets led to new account sign-ups, they said.
The firm had about $60 million in revenue in March, roughly tripling from the same month last year, one of the people said.
Prior investors include Alphabet Inc.’s GV, DST Global, Kleiner Perkins Caufield & Byers, New Enterprise Associates and Index Ventures. Sequoia is also an existing investor.
Robinhood seems to be bucking the trend of many startups, which have been hit particularly hard during the crisis. An estimated 23,000 employees have been let go at 241 startups since March 11, according to data compiled by Layoffs.fyi. Another financial technology startup, Carta Inc., the software company formerly known as eShares, said Wednesday it’s cutting 16% of its workforce, even as it seeks an additional $200 million in funding, according to people familiar with the matter.
Founded in 2013, Robinhood allows commission-free stock trading via a mobile app, a format that’s since been copied by traditional brokers including Charles Schwab Corp. The company, which also provides other financial services, passed 10 million users in December.
