ROBINHOOD RAISES MORE FUNDS,

Robinhood Markets' biggest backers are plowing money into the beleaguered online brokerage at an unprecedented pace.

Investors led by Ribbit Capital have poured US$3.4 billion into the firm in a matter of days, including US$2.4 billion announced Monday. The cash infusions come as Robinhood grapples with outraged customers, increased scrutiny from Washington and questions about its plans for an initial public offering.

Robinhood told investors it would use the bulk of the fresh funds as collateral at the industry's central clearinghouse, the Depository Trust & Clearing Corp., according to a person familiar with the matter. A spokeswoman for the firm declined to comment beyond the announcement.

Separately, Robinhood continued to ease the trading restrictions it first imposed last week.

The Reddit-fuelled trading mania focusing on heavily shorted stocks forced Robinhood to curtail trading in dozens of names last week, after increased capital demands from Wall Street's gatekeepers at the DTCC. The crisis pushed Robinhood to raise emergency funding as it seeks to assuage millions of passionate users.

“We're confident that Robinhood will emerge stronger through this phase of growth and unprecedented demand,” said Micky Malka, managing partner at Ribbit.

The financing comes in two parts. The first US$2.4-billion tranche will convert into equity at a US$30-billion valuation — or a 30-per-cent discount to the IPO, whichever is lower, according to people with knowledge of the terms. A subsequent US$1-billion infusion converts at the lower of the 30-per-cent IPO discount, or a US$33-billion valuation, one of the people said.

Robinhood is also in talks with banks about raising US$1 billion of debt, Reuters reported.

The latest financing also includes Iconiq Capital, Andreessen Horowitz, Sequoia Capital, Index Ventures and NEA, Robinhood said in a blog post.

“This round of funding will help us scale to meet the incredible growth we've seen and demand for our platform,” chief financial officer Jason Warnick said.

Chief executive Vlad Tenev has tried in public appearances — including with Elon Musk — to explain why Robinhood halted trading in popular stocks including GameStop Corp. Still, that wasn't enough for many customers. Despite the relaxation of trading limits — reducing the number of affected securities Sunday to eight from 50 — some of its more than 13 million users are angry that they were restricted at all.

On Monday, Robinhood further eased the restrictions, allowing customers to trade as much as 20 shares of GameStop, up from a previous limit of four.