If RH are able to raise $3.4bn in less than a week then

Couldn’t Freetrade do a VC smash grab, get a few hundred million of serious cash injection, and dominate the European market; maybe even take on RH in their own backyard? There is clearly huge VC appetite in this space.

Robinhood and Freetrade have different business models. Plus scaling across one country (USA) is very different to scaling across 20+.

FT are working towards an institutional raise but unfortunately it’s a bit apples and oranges (despite them both being commission free stock brokers).

Edit: But I do hope this recent hockey stick growth is reflected in the upcoming raise / valuation.

2 Likes

Probably. But growth management is tricky. Throwing 50 new recruits and/or 100,000 new customers into the mix overnight might be more destructive to the company than constructive.

Personally, I think Freetrade is doing a great job with the balancing act. Keep up the good work!

3 Likes

Robinhood gave generous terms to get the cash so quickly, it’s low risk for investors (at least in the first $1bn).

Robinhood’s bid to ‘democratise finance’ collides with Wall St reality - FT

“By late in the day on Thursday, Robinhood revealed it had commitments from existing investors to inject $1bn to fortify the group’s balance sheet. The investors have the option of converting their debt investment into equity at either a valuation for the company of about $30bn or a 30 per cent discount to an eventual initial public offering price, whichever is lower, said people familiar with the fundraising.

Four days later, the investors added another $2.4bn, bringing Robinhood’s total financing to $3.4bn. Some of the investors agreed to accept less favourable terms than what the company offered last week, people briefed on the fundraising said.

The deal represented a relatively low-risk bet on the future of Robinhood, though it could prove costly to the company if it undershoots its targeted valuation in an IPO. Private investors most recently valued Robinhood at $11.7bn last year.”

2 Likes

Rh raised 3 billion because of NSCC demands. Elon asked who’s behind NSCC to which Rh CEO was like I dunno.

Epic.

1 Like