(Bloomberg) -- Robinhood Markets Inc. has raised a new funding round that saw its valuation soar nearly fourfold, and brought in several new investors to the company. The online stock brokerage startup also reported big user growth, reaching more than 4 million accounts—surpassing E*Trade Financial Corp.’s 3.7 million brokerage accounts.
The latest round values Robinhood at $5.6 billion, up from $1.3 billion just over a year ago. Investors signing on to back the Menlo Park, California-based startup for the first time include Sequoia Capital, Kleiner Perkins Caufield & Byers, Iconiq Capital and Alphabet Inc.’s growth fund CapitalG.
DST Global, a venture capital firm founded by Russian billionaire Yuri Milner, led the $363 million investment, whose deal terms were being finalized in March. The company’s board will not change following the investment.
Robinhood will use the cash influx to "make big investments in tech and infrastructure," introduce new products and step up its hiring, co-CEO Baiju Bhatt said. He also said the company aims to expand its reach. "The plan for the next few years is to go from a full-service investment company to a full-service consumer finance company," Bhatt said.
Founded in 2013, Robinhood made a name for itself by allowing users to trade stocks for free on its mobile app. Since then, it’s rapidly added users and introduced a number of new products. Most notably, the startup announced options trading in December, and trading for select cryptocurrencies on its platform in January—both products it said have driven both customer and revenue growth. Other additions include the ability to execute trades on its website, rather than only on the app.
To date, Robinhood’s more than 4 million users have traded over $150 billion worth of securities on its platform, according to a company spokesman. When the company raised its previous round of funding in April of 2017, it had half as many accounts.
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