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Robinhood is all set to raise $200 million in latest funding

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Robinhood, a U.S. –based financial services company listed in the U.S. stock exchanges has managed to build a $7 billion business in a span of six years.

Robinhood, a U.S. –based financial services company listed in the U.S. stock exchanges has managed to build a $7 billion business in a span of six years. The company is very close to securing $200 million in funding from its financial backers. This is according to a Bloomberg report. Investments towards the company are still ongoing and a $10 billion valuation of the company is expected once complete.

Last year, Robinhood closed the majority of its funding and at the time, the industry was valued at $5.6 billion. This application has had tremendous achievements and hence a steady user base recorded. Robinhood Markets Inc secured $8 billion revenue in the year 2017 and a projection of $47 billion yearly has been made over the company. Robinhood is at now the fastest developing agent ever recorded. E* Trade, an online trading platform which was initiated in the year 1982, had 3.7 million accounts at the time. Robinhood surpassed this mark to reach 4 million last year.

Ways Robinhood makes its money

The company makes its money mainly through three ways: selling its orders in big amounts to exchanges seeking more liquidity, the interests it secures from lending money to its users which are secured in the Robinhood account and the Gold subscriptions which charge the users $10 to about $200 monthly to lend anywhere in between $2,000 to $50,000 for it to trade on margin.

This trade orders of high frequency in exchange has led to criticism from a number of experts due to lack of transparency. This application is quite popular with millennials who see the commission-free factor as an attractive point. 43% of the millennials, trust cryptocurrency which traded more than the stock exchanges according to a nationwide survey carried out recently. A report later showed that 90% of millennials have a preference to cryptocurrency over gold.

Baiju Bhatt, the Co-Founder, and co –CEO of Robinhood said that crypto had immensely added to the growth of industry and projected a likelihood of Robinhood elevating to the level of a full-service consumer finance company. This was according to a report he told the CNBC last year.

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