Text size
A IPO would allow Robinhood to raise new capital and access funding.
AFP via Getty Images
Robinhood Markets, the commercial application that has been examined
GameStop
negotiations, moves forward with plans to go public, said four bankers and venture capitalists.
Stock market plans from the start are on track and an offer is expected in the coming months, probably in the second quarter, three of the people said.
“He [Robinhood] The IPO is going well, ”said one of the bankers.
Goldman Sachs
(ticker: GS) advises on the offer, said one of the people.
A IPO would allow Robinhood to raise new capital while allowing the company, once public, to access financing, people said. Robinhood was pushed to raise $ 3.4 billion last week after a buying frenzy forced the trading platform to increase the money it deposits to clearing centers that process its operations.
Robinhood and Goldman executives declined to comment.
PitchBook, founded in 2013, Robinhood offers commission-free transactions in stocks, ETFs, options and cryptocurrencies, as well as margin. The company sends customer orders to market makers such as Citadel Securities, Virtu Americas and G1X Execution Services. In 2020 it had 1,281 employees.
On Monday, Robinhood said it added another $ 2.4 billion in a round led by
Ribbit Capital.
That funding came after the startup raised $ 1 billion from current investors last week.
The Menlo Park, California-based company has been pressured after GameStop’s limited Robinhood trading (ticker: GME) and other stocks. The move caused outrage among its customers, investors and on Wall Street. Even Rep. Alexandria Ocasio-Cortez (DN.Y.) and other lawmakers wrote the past
Twitter
that Congress should delve deeper into Robinhood’s actions.
Robinhood tried to explain its actions, claiming that the clearing center’s requirements motivated the company to limit trading in certain shares, according to a January 29 blog post. The company said the clearing center’s mandatory deposit requirements increased to ten times the normal number and Robinhood “had to take steps to limit the purchase of these volatile securities to ensure we could comfortably meet our requirements. “.
Fury at Robinhood’s tactics did not diminish his popularity. The app was downloaded more than a million times last week. This prompted a hedge fund executive to say that Robinhood’s IPO will still be a winner. “If they are growing users and have a plan to address PFOF issues with Citadel, I think they can still be made public with some Twitter enemies,” the executive said.
PFOF refers to payment for order flows. Robinhood operations are sold to market managers or large companies such as Citadel.
A IPO would provide an outlet for many Robinhood investors. They include D1 Capital Partners, Sequoia Capital, NEA, 9 Yards Capital and Unusual Ventures. Some of Robinhood’s top sponsors, such as Index Ventures, Draper Associates and Andreessen Horowitz, participated in the company’s $ 3 million seed round in 2013.
Index Ventures and Draper declined to comment. Ribbit, Sequoia, NEA, 9 Yards and Andreessen did not return messages for comment.
Write to Louise Beltran at [email protected]