(Bloomberg) — DriveWealth, a financial technology company that helps companies build competitors to Robinhood Markets Inc., said it has raised $450 million in a funding round at a sharply elevated valuation from a year ago.
The round values the company at about $2.85 billion and will be led by Insight Partners and Accel.
SoftBank Group Corp.’s Vision Fund participated in the round, alongside Greyhound Capital and Citigroup Inc.’s Citi Ventures arm, DriveWealth founder and Chief Executive Officer Robert Cortright said in an interview.
The cryptocurrency exchange FTX also invested, along with existing backers Fidelity International and Steven Cohen’s Point72 Asset Management, Cortright said.
Investors are also aiming to purchase $300 million in secondary shares from existing shareholders, according to people familiar with the matter, who asked not to be identified because the matter is private.
DriveWealth’s valuation is up from about $200 million last year, one of the people said. Point72, owns about 15% of the company, the person said.
DriveWealth provides technology that lets businesses such as Revolut and Square Inc.’s Cash app offer fractional trading, a trend that was popularized by newly public brokerage firm Robinhood.
Like Robinhood, whose valuation soared with the surge in online investing as coronavirus pandemic lockdowns took hold and with this year’s meme-stock frenzy, competitors and related companies have also seen their private values rise.
Fractional shares allow investors to buy a portion of a stock with as little as $1, instead of having to buy a full share of stocks. That’s particularly helpful to those seeking to invest in companies such as Amazon.com Inc., whose shares closed at almost $3,318 on Thursday.
“It’s never been possible for someone in India to buy $20 worth of Amazon with a flick of a finger,” Cortright said.
“A lot of people want to replicate the Robinhood model,” he said, emphasizing that DriveWealth serves companies instead of Robinhood’s consumer-facing business model. He said that the company intends to go public “down the road.”
Deven Parekh, managing director at Insight Partners, said that the company helps provide “a seamless process to access equities globally.”
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