Jun 30, 2021

Accel closes US$3bn across three funds in US and EMEA

Accel
VC
Investment
funding
2 min
VC firm Accel has announced $3bn in new funding as it supports innovation in the US and EMEA markets

Based in Palo Alto, California, Accel has been operating since 1983. It was founded by Arthur Patterson and Jim Swartz, two visionary investors who believe in a ‘prepared mind’ approach to the industry - referencing a quote attributed to Louis Pasteur, "Chance favours the prepared mind." As such, the company combines preparation with an eye for opportunity.

Over the years, Accel has built a strong stable of tech-based investments, including Facebook, Dropbox, Spotify, Etsy, Venmo, UiPath, and GoFundMe. Clearly, the company has an eye for talent and its pace doesn’t appear to be slowing down.

Its latest $3.05bn funding drive breaks as follows:

  • $650mn for its 15th US early-stage fund
  • $650mn for its seventh European and Israeli early-stage fund
  • $1.75bn for its sixth growth fund

“We are grateful again for the support shown by our Limited Partners, many of whom have been with us for nearly forty years,” said Accel. 

“These partners, which include many large foundations, university endowments and research institutions, charitably finance and do ground-breaking, critical work to advance important social and scientific causes. In these challenging times that work is more important than ever. It energizes us to play a part in their efforts.”

Breaking down geographic boundaries

One of the most striking things about Accel’s portfolio is its geographic reach: from Canada to California, Romania, and India. The company is dedicated to locating innovation wherever it lies, “Today’s exceptional founders are not bound by geography in the pursuit and realisation of their visions,” it said.

This certainly aligns with popular opinion in the VC world; in our article ‘A VC culture shift is democratising investment in 2021’, Manuel Silva Martínez, General Partner at Mouro Capital, suggested that soon there would be no separate ‘London scene’ or ‘San Francisco scene’, “which is great news for smaller ecosystems traditionally underserved by capital, but it will make VC competition much more fierce.”

However, competition is rarely a bad thing for good business. With tech companies continuing to break down the borders of geography that impede their international growth, we can surely expect greater connection, integration, and inclusivity for customers on a global scale.

Image source: Accel

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Jul 23, 2021

Robinhood faces $35mn fine from New York DFS

Robinhood
IPO
Nasdaq
gamestop
2 min
Robinhood faces $35mn fine from New York DFS
Robinhood announced it had reached a ‘settlement’ with regulators and is on target for a $35bn valuation for its initial public offering

The renegade trading platform, Robinhood, which was central to the GameStop shares frenzy earlier this year, faces a US$35mn fine from New York financial regulators.

The company’s crypto division was issued with a wrist slap in 2020, following the red flagging of several “matters requiring attention”. Robinhood revealed it had reached a settlement with the New York State Department of Financial Services regarding the issues, which related to “alleged violations” of cybersecurity and anti-money laundering rules.

Robinhood valuation

The news follows on from the announcement earlier this week that the trading platform favoured by armchair investors, which almost broke Wall Street earlier this year, has an expected valuation of $35bn following its IPO.

Critics of the platform say Robinhood encourages “risky behaviour” among inexperienced (armchair) investors. The app has also been criticised for not informing customers that much of its profits are generated by routing their trades to Wall Street firms taking the other side, or so-called "payment for order flow."

Robinhood said last month they expected the DFS fine to be at the $15mn mark, adding it would be “the bottom of the range for our probable loss in this matter”. The $35mn penalty is on top of the record $70mn Robinhood incurred from US financial regulator FINRA in June, for “lax vetting and outages.”

However, the settlement indicates the company’s IPO will go ahead as planned, despite initial concerns the investigation could see the float delayed until later this year.

Robinhood floats imminent

Despite the regulatory hiccups, Robinhood priced its IPO between US$38-US$42 per share, giving the platform the US$35bn valuation and analysts predict the firm’s debut on the Nasdaq could occur as early as next week.

Reports suggest that 55 million shares will be offered. Robinhood founders, Baiju Bhatt and Vlad Tenev are also set to sell 2.63 million shares.

Robinhood democratising investment

Launched in 2013 by Tenev and Bhatt, who were Stanford University roommates, Robinhood’s founders will retain most of the voting rights after the IPO. Bhatt reportedly holds 39% of the voting power of outstanding stock, while Tenev holds 26.2%.

The online brokerage, which came under fire for its handling of the GameStop trading debacle, which saw the platform limit stocks to investors, states its mission is to “democratise” investing and is one of the most highly anticipated IPOs of the year.

Robinhood was valued at $11.7bn in autumn 2020 following a private equity funding drive. The new valuation will mean represent a three-fold increase in the company’s market value in less than 12 months.

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