Cryptocurrency-friendly stock trading app Robinhood is now valued at $5.6 billion following a mammoth funding round.
The fintech startup announced on Thursday that it had raised $363 million in a Series D funding round led by DST Global.
“At Robinhood, we’re guided by the belief that America’s financial system should work for everyone – not only the wealthy,” the company said in a statement. “Our platform has also grown significantly, reaching over four million users, cementing Robinhood Financial as the fastest-growing brokerage ever.”
Though best known for its commission-free stock brokerage platform, Robinhood has also begun rolling out bitcoin and ethereum trading, with more coins expected to be added in the future.
The funding round will provide the company with a gigantic war chest as it seeks to take aim at Coinbase, the dominant firm in the US cryptocurrency brokerage market.
At present, Robinhood Crypto is available in 10 states, and the company continues to release it on a state-by-state basis as it acquires money transmitter licenses in new jurisdictions.
Coinbase’s platform is far more robust, and the company also has first-mover advantage — along with a global user base that includes 20 million registered accounts (users can sign up for Coinbase wallets even if trading is not offered in their locality). Coinbase has reportedly internally valued itself at $8 billion, though this has not been confirmed by a third-party audit and the firm has declined to comment publicly.
However, Robinhood has more in its favor than just a well-stocked war chest. The platform — which started as a smartphone app but now also has a web interface — allows users to hold cryptocurrencies in the same account that they use to trade stocks, so it may be preferable for people who primarily view cryptocurrency primarily as an investment rather than a financial instrument.
Robinhood also offers premium users the ability to trade on leverage, though this feature is not currently available for its cryptocurrency service.
“We expect by the end of the year to be either the largest or one of the largest crypto platforms out there,” Robinhood co-founder and co-CEO Baiju Bhatt told Fortune. “But we also really feel we’ll have the absolute best experience for investing in crypto as well—from having a large variety of coins available to a more favorable cost structure—mainly no commissions—to just quality of product.”
Of course, Coinbase and Robinhood aren’t the only two players gunning for this segment of the lucrative retail market. Fellow fintech startups Square and Circle Invest each hope to capture a large segment of this market demographic as well.
Featured Image from Robinhood