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Robinhood raises $1B after GameStop debacle and lawsuit
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| GameStop was among 13 companies that Robinhood restricted trading for Thursday on its mobile app. (Spencer Platt/Getty Images) |
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Robinhood has raised more than $1 billion from its existing investors, the New York Times reports, after users flooded its trading app seeking to drive up the share price of GameStop and others shorted by hedge funds.
The fundraise coincides with a class-action lawsuit being filed against Robinhood after it restricted trading on the app, drawing the ire of millions of retail investors.
A community of Reddit users is behind the coordinated bull run that has led to extreme stock market volatility over the past several days. The activity has put pressure on Robinhood to pay those who are owed money from their trades while making sure it has enough cash for its clearing facility. Sequoia Capital and Ribbit Capital are said to be among the investors contributing to the fresh round.
On Thursday morning, Robinhood restricted trading in the stock of 13 companies, including GameStop, AMC Entertainment and BlackBerry, only allowing users to close out their positions. Robinhood co-founder Vladimir Tenev later tweeted that the app would allow limited buys of those companies' stocks. Other major online brokerages such as Charles Schwab's TD Ameritrade and Interactive Brokers Group also restricted trading of certain companies' stocks.
The lawsuit, filed in the Southern District of New York, claims that by restricting retail investors' access to trading amid a meteoric stock-price rise in companies like GameStop and AMC, Robinhood manipulated the open market. Several other federal lawsuits have reportedly been filed against Robinhood.
The stock kerfuffle has also drawn the eyes of several lawmakers. Rep. Alexandria Ocasio-Cortez of New York tweeted about the need to know more about Robinhood's decision to curb trading. And lawmakers in the House and Senate have pledged to hold hearings on the recent market occurrences. |
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WeWork reported to be in talks with SPACs, other investors
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| (Getty Images) |
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WeWork may still go public after all.
- The SoftBank-controlled provider of shared office space is reportedly in talks that could result in it being listed through a reverse merger with a blank-check company at a valuation of around $10 billion.
- If completed, such a deal would close a circuitous journey to the public markets for a company whose original IPO plans collapsed in chaos more than a year ago.
- The Wall Street Journal reported that WeWork has received offers from more than one party about a reverse merger with a special-purpose acquisition company, leading to talks with a SPAC affiliated with Bow Capital.
- WeWork has also received offers to raise a private funding round, the Journal reported. If it goes that route, it would remain a private company.
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A message from World Business Chicago & P33
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The new capital of post-pandemic innovation
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By Dr. Garry Cooper, CEO & co-founder of Rheaply
2020 saw a once-in-a-lifetime jolt in venture capital, where investors are now flocking to resilient startup hubs like Chicago.
Chicago startups not only stepped up in the fight against COVID-19, but navigated the ongoing pandemic as an opportunity to innovate, collaborate and evolve. Investors are flocking to quality, especially since Chicago has recorded the highest ratio of exit value to invested capital of any other US city. For example, Rheaply was able to raise $2.5 million in a seed round led by leading Midwest investor Hyde Park Angels, and successfully scaled through partnerships with the likes of AbbVie and the US Defense Logistics Agency.
Learn more about the Midwest tech capital via the recently published Chicago VC Ecosystem Report by World Business Chicago and P33 here. |
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Faraday Future joins reverse-merger craze; read PitchBook's EV/Mobility Handbook
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| Faraday test vehicle (Courtesy of Faraday Future) |
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Electric car maker Faraday Future plans to go public through a $1 billion reverse merger with Property Solutions Acquisition Corp., joining a stampede of private EV companies that have made the leap by teaming up with blank-check companies.
- That deal boom is the subject of PitchBook's newly published EV/Mobility SPAC Handbook, which maps out the startups that have completed SPAC mergers (or announced plans to do so). Other highlights of this analyst note:
- Introducing the PitchBook SPAC Mobility Index, a basket of 26 EV and mobility companies that went public through SPAC reverse mergers with a combined value of $100 billion.
- The Index is coming off a red-hot second half of 2020, when it notched a 77.7% return.
- See analysts' top picks for future EV and mobility SPAC merger targets, including lidar specialist AEye, automaker Lucid Motors and EV platform provider Rimac Automobili.
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Our top 10 articles of January
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From the archives: As the tale of one 15-year-old whiz kid reminds us, this week's GameStop saga isn't the first time investors have used the power of message boards to turn unlikely stocks into enormous profits. [The New York Times]
Examining some of the causes and implications of Andreessen Horowitz's new effort to get into the media game. [Columbia Journalism Review]
Watching WallStreetBets become a household name this week has been strange for everyone. It's been particularly surreal for the subreddit's exiled founder. [The Wall Street Journal] |
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Since yesterday, the PitchBook Platform added:
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15
VC valuations
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1854
People
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594
Companies
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34
Funds
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2014 Vintage Global Real Assets Funds
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Lyra locks in $187M Series E
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Cloud data protection startup secures new funding
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SparkPost secures $180M growth deal
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| SparkPost, which creates email sending technology, has raised a $180 million growth investment from LLR Partners, NewSpring Capital and PNC Bank. Based in Maryland, SparkPost provides tools for planning and optimizing email programs used by clients including Adobe, The New York Times and Zillow. The company was valued at more than $100 million with a round of venture funding in 2015, according to PitchBook data. |
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Mediafly banks $25M in debt and equity
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| Mediafly, the developer of a customer relationship and content management platform for sales and marketing teams, has raised $25 million. Investors including Boathouse Capital contributed to the equity portion, while Sterling National Bank provided the debt funding. The Chicago-based company was valued at more than $48 million in 2019, according to PitchBook data. |
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Concert Health brings in $14M Series A
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Squarespace confidentially files for IPO
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| Squarespace has confidentially submitted its IPO prospectus to the SEC. The New York-based company, which provides a website building and brand marketing platform, was worth $1.7 billion in 2017 after General Atlantic invested $200 million, Bloomberg reported. Squarespace's other investors include Index Ventures and Accel. |
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Varsity Tutors mulls SPAC deal
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| The parent company of Varsity Tutors has considered going public via a merger with a TPG Capital-backed SPAC, Axios reported. The online learning startup has raised over $100 million from backers like the Chan Zuckerberg Initiative, Learn Capital and TCV. Varsity Tutors offers a range of classes, professional certifications, tutoring services and more. |
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Workday to acquire Peakon for $700M
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| Peakon, the operator of an online employee engagement platform, has agreed to be purchased by Workday in a $700 million all-cash deal. The Copenhagen-based company has previously raised capital from investors such as Atomico, Heartcore Capital and EQT Ventures. Publicly traded on the Nasdaq since 2012, Workday is the provider of a cloud-based finance and HR platform. |
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Stryve Foods inks $170M SPAC deal
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GGV pulls in $2.5B+ for funds
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| GGV Capital has collected $2.52 billion for its latest slate of funds. Across the four new vehicles, the firm plans to continue to focus on sectors including enterprise tech and smart technology. Several of its portfolio companies went public recently, including Airbnb, Affirm and Opendoor. |
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Arch raises $1.85B for latest fund, makes personnel moves
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| Arch Venture Partners has raised $1.85 billion for its eleventh namesake fund, which will be used to invest in early-stage biotech companies in a range of areas including infectious diseases, neurology and mental health. The firm also promoted partner Paul Berns to managing director, added Jay Markowitz as senior partner, named Carol Suh and Sean Kendall principals, and promoted Corey Ritter and Nilay Thakar to the role of senior associate. |
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SoftBank launches $100M Miami initiative
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| SoftBank has announced it plans to invest $100 million in Miami-based startups to help the city evolve into a hub for technology and business innovation. The Japanese conglomerate will draw capital for the new initiative from various existing funds. |
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Robert Downey Jr. rolls out new fund
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| Actor Robert Downey Jr. has launched FootPrint Coalition Ventures, a rolling firm focused on sustainability startups in sectors including robotics, artificial intelligence, software and financial technology. The firm plans to support early- to late-stage companies with investments of at least $250,000 apiece. |
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"US investors pumped capital into Europe's VC-backed companies at a healthy rate in 2020. International travel restrictions and uncertainty surrounding Brexit and the US presidential election did not hamper activity, as total value of deals with US investor participation grew 19.4% YoY to a new annual peak of €23 billion."
Source: PitchBook's 2020 Annual European Venture Report |
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