Robinhood seeks up to US $35B valuation

Online brokerage eyes mega-IPO

Robinhood Markets Inc. is targeting a valuation of up to US$35 billion in its initial public offering in the United States, the company revealed in a filing on Monday, setting the stage for one of the highly anticipated stock market listings of the year.

The listing plans come just months after the online brokerage found itself at the centre of a confrontation between a new generation of retail investors and Wall Street hedge funds in late January.

Robinhood was aiming for an IPO valuation of up to US$40 billion, Reuters had previously reported.

About 55 million shares are being offered in the IPO to raise over US$2.3 billion. Nearly 2.63 million of those shares are being offered by the company's founders and chief financial officer, the filing showed. Proceeds from those will not go to Robinhood.

Shares are expected to be priced between US$38 and US$42, the company said.

Salesforce Ventures, the investment arm of software provider Saleforce.com Inc., is looking to purchase up to US$150 million worth of Class A common stock at the IPO price, the filing showed.

Robinhood was founded in 2013 by Stanford University roommates Vlad Tenev and Baiju Bhatt. They will hold a majority of the voting power after the offering, the filing showed, with Bhatt having around 39 per cent of the voting power of outstanding stock while Tenev will hold about 26.2 per cent.

The company's platform allows users to make unlimited commission-free trades in stocks, exchange-traded funds, options and cryptocurrencies. Its easy-to-use interface made it a go-to for young investors trading from home during coronavirus-induced restrictions and its popularity has soared over the past 18 months.

The trading mania in the so-called meme stocks helped fuel a four-fold jump in its revenue over January to March, Robinhood's IPO filing earlier this month detailed, but the quick expansion came at a cost.

The company faced criticism after it was forced to curb trading in the middle of the surge this year in GameStop and other previously beaten-down stocks.

At the time, Robinhood was forced to raise US$3.4 billion in emergency funds after its finances were strained by the massive jump in retail trading and a resulting jump in capital demands from clearing houses.

That round valued the company at around US$30 billion, according to people familiar with matter.

Robinhood's stock market flotation comes amid a record 15-month run for the U.S. IPO market, as investors rushed to buy shares of highgrowth tech companies.

The company plans to list on the Nasdaq under the symbol “HOOD.”