Robinhood’s mountainous, two-fragment Sequence F round came partly in Q2 and partly in Q3. The app-essentially based trading platform launched the first $280 million in early Can also, valuing the firm at round $8.3 billion, up from a outdated mark note of round $7.6 billion.
Then in July, Robinhood tacked on $320 million more at the same mark, raising its valuation to round $8.6 billion.
While it has long been identified that financial savings and investing apps and providers are seeing a convey in 2020, precisely what led to buyers to pour $600 million more into this already-filthy rich firm was once less in an instant evident. Newest data launched by Robinhood bearing on one of its revenue sources would possibly possibly per chance merely back impress the rapid-hearth capital events.
Filings from Robinhood masking the April thru June duration, Q2 2020, reward that the firm’s revenue from fee for assert float, a blueprint at some stage in which a dealer is paid to route customer orders thru a issue group, or celebration rose within the guts of the duration. As TechCrunch has coated, Robinhood generates a huge part of its revenue from such actions.
The firm is steadily by myself in doing so. As a original file from The Block, shared with The Alternate sooner than publication notes, Robinhood’s Q2 fee for assert float haul was once impressive, but now not singularly so; trading houses admire E*Swap and Charles Schwab also grew their incomes from assert float routing within the duration.
Nonetheless Robinhood’s good points blueprint within the wake of the company’s promise to shake up its alternate choices trading setup after a customer took their very include life. As we’ve written, there is a stress between Robinhood’s desire to restrict who can ranking admission to alternate choices trading, its have to grow and the incomes alternate choices-related assert float can power for the budding fintech huge.
This morning, on the opposite hand, we are specializing in revenue convey over diversified points (more to blueprint on these later). Let’s dig into Robinhood’s Q2 assert float revenue numbers and discover what we are able to search out out about its speed rate and up-to-the-minute valuation.
A huge Q2
In step with The Block’s include calculations, Robinhood saw saw its total fee for assert float revenue roughly double, rising from $90.9 million in Q1 2020 to $183.3 million in Q2 2020, a 102% develop.