Free stock-trading app maker Robinhood Market Inc. is close to raising $250 million in new funding on an $8 billion valuation, according to sources reported today by Bloomberg.

The new round, which would be the company’s Series E, is said to be being led by SoftBank Group Corp. Robinhood last raised funding — $323 million in July on a $7.6 billion valuation — despite rumors that it was considering an initial public offering.

According to data from Crunchbase, SoftBank, presuming the new funding report is true, is a new investor for Robinhood. Notable existing investors include DST Global and Sequoia Capital.

Founded in 2013, Robinhood rose to fame by offering the first and now the most popular zero-fee stock trading app, often cited as beloved by millennials. The company first started offering a web-based service in November 2017 before first adding support for cryptocurrency trading in January 2018.

With popularity, Robinhood has also had a number of issues. In November users found a glitch in Robinhood’s system that allowed them to trade stocks with excess borrowed funds. With this “infinite money cheat code,” one user claimed to have funded a $1 million position with a $4,000 deposit, while another claimed to have accessed $50,000 for free.

That was a minor issue compared with what came next. Robinood’s app went offline March 2 during a record surge in the Dow Jones following the first coronavirus-related crash. Despite promising customers that it had fixed its systems and it wouldn’t happen again, the app was also down the following day. Forward to March 9 and the app was down yet again on a day the Dow Jones Industrial Average suffered its single biggest point drop in history.

Robinhood’s 10 million users were not simply unimpressed but outright angry given its inability to trade during historical events. The outage may have cost users millions if not more in missed opportunities, let alone the ability to sell stock on a down market.

Shareholders Foundation Inc. announced April 13 that it had lodged a class action lawsuit on behalf of customers affected by the outages. “The plaintiff claims that the outages caused users to miss out on some of the then-biggest highest single-day market gains in recorded history and that Robinhood should have provided a financial services platform that would have been robust enough to handle that trading volume and should have had a backup system to handle such outages,” the statement reads.

Should Robinhood raise the new round, it would take the company’s total funding to $1.162 billion.

Photo: Robinhood