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Jay-Z-backed Robinhood Stock Brokerage Raising Capital At $8 Billion Valuation

Jay-Z-backed Robinhood Stock Brokerage Raising Capital At $8 Billion Valuation

Robinhood Stock Brokerage
Robinhood Markets Inc. – the online stock brokerage company backed by artist and mogul Jay-Z – is nearing $8 billion in fundraising capital. In this photo, Jay-Z makes an announcement of the launch of Dream Chasers record label in joint venture with Roc Nation, at the Roc Nation headquarters on Tuesday, July 23, 2019, in New York. (Photo by Greg Allen/Invision/AP)

Robinhood Markets Inc. – the online stock brokerage company backed by investors like billionaire artist and mogul Jay-Z – is nearing $8 billion in fundraising capital, reported Bloomberg. However, the figure is “a pre-money valuation.”

Touting “commission-free investing” via a mobile app, the Silicon Valley start-up has over 10 million users. It also boasts “record revenue growth” according to Bloomberg.

Estimated at a $7.6 billion value after a funding round in July 2019, the California-based company was founded in 2013. Recently, it has been plagued by technical problems, outages and maxed-out credit lines. It blamed the problems on “unprecedented” user demand.

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In a statement, the company’s co-founders Baiju Bhatt and Vlad Tenev said they were working to mitigate similar situations in the future.

“When it comes to your money, we know how important it is for you to have answers. The outages you have experienced over the last two days are not acceptable …,” the statement read. “Our team is continuing to work to improve the resilience of our infrastructure to meet the heightened load we have been experiencing. … We take our responsibility to you and your money seriously.”

Jay-Z – and other artists like Snoop Dogg and Nas – invested in the company in 2018. The Wall Street Journal (WSJ) said it is a company best used by small investors.

Chris Nagy of KOR group said those trading at large levels would be better off elsewhere because they’d find better share prices.

“At the end of the day,” Nagy told WSJ, “there’s no such thing as a free lunch.”