Robinhood invests in Talos at $1.5B as crypto infrastructure scales fast

Key Points

• Robinhood invests in Talos at a $1.5 billion valuation through a Series B extension.

• Talos strengthens institutional crypto trading infrastructure and expands through acquisitions, integrations, and partnerships.

• Robinhood Crypto advances its blockchain strategy with Arbitrum-based blockchain and tokenized stock trading initiatives.

• Strategic investors join the round, highlighting rising demand for reliable digital asset market plumbing worldwide.

Robinhood invests in Talos at a $1.5B valuation, extending the company’s Series B round.

The retail trading leader and the institutionally-focused, crypto-trading-technology firm, which provides infrastructure for global banks and funds, have partnered together to create a comprehensive investment vehicle for deeper liquidity, seamless execution and risk management for digital assets across the globe. With over 100 client firms (and $21 trillion in assets managed by those clients) Talos is working with its partner to provide a trusted and robust framework for global institutional digital asset investing.

The additional funding comes in the form of a 45M dollar equity extension. This extension included both new strategic investors and existing strategic investors with significant experience in both finance and crypto. New investors include Sony Innovation Fund, IMC, QCP and Karatage; the group joins other strategic investors who were already invested in Talos prior to the extension. In 2022, Talos previously raised 105M dollars in a Series B funding round at a significantly lower valuation than the current extension. The overall amount of the Series B extension is now 150M dollars and represents a strong endorsement of Talos’ efforts to build a reliable technology infrastructure.

Extension of Series B Funding Signals Confidence in Institutional Digital Asset Infrastructure

Talos addresses the entire trading lifecycle of its clients, including order routing, post-trade settlement workflow, and everything in between. It does so via a single interface or API that allows clients to tap into aggregated liquidity from all exchanges, OTC desks and prime brokerages. Clients can use tools provided by Talos to measure execution quality, perform pre-trade checks, reconcile their trades at the end of the day, etc. A key advantage of Talos’ approach is that it offers a common framework that can be used by both the front office and compliance teams within each organization.

Robinhood continues to expand its global footprint through blockchain and digital asset products. Robinhood Crypto has recently released features for active traders and long-term holders in multiple geographies. In addition, Robinhood is developing an Arbitrum-based blockchain to support developer activity and reduce transaction costs associated with its users. In Europe, Robinhood now offers tokenized stock trading along with access to select perpetual futures and staking features.

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Robinhood Crypto Activity Expands Across Regions and Product Categories

Management at Talos emphasizes that there is an increasing demand from traditional firms to connect to digital rails. To me, this partnership creates an environment where the two companies can work together to create better liquidity and reliable post-trade processes. Strategic investors typically bring distribution, market data, and flow to a platform that reinforces the network effects across the platform. The makeup of the round appears to emphasize the practical effort to scale connectivity rather than speculative marketing efforts.

The company expands its product offering through the acquisition of firms operating in the data, analytics and infrastructure layers. Recent examples include the acquisition of Coin Metrics, expanding Talos’ on-chain analytics, market data and benchmark index offerings. Prior to the acquisition of Coin Metrics, Talos acquired D3X Systems, Cloudwall and Skolem, adding capabilities such as modeling, risk tooling, and middleware to its offering. By acquiring these firms, Talos is able to increase the depth of its product offering while reducing the time required to integrate them into its offering for demanding institutions globally.

Acquisition Efforts Expand Data, Analytics, and Execution Across Talos Stack

By partnering with Talos, Robinhood will be able to offer improved liquidity access, pricing and routing for its crypto customers. Improved connectivity should result in tighter spreads and greater reliability during times of high volume. Additionally, the partnership will provide Robinhood’s institutional-grade controls, such as audit trails and standard post-trade reporting, to support its development of products for regulated markets and international distribution channels.

More broadly, the partnership represents a maturation of the market for dependable infrastructure supporting institutional digital asset activity. Banks, brokers and asset managers continue to test, implement, and roll out compliant digital asset workflows. As providers of reliable, scalable, and connected services, they will be well-positioned to gain a large share of the institutional investor marketplace. The Series B extension for Talos illustrates this transition toward durable, scalable and connected services for professional investors.

Robinhood Invests in Talos as Institutional Digital Asset Infrastructure Requirements Intensify

As we move forward, attention will be given to product roadmaps, cross-vendor liquidity quality and global regulatory alignment. We will also be watching the speed of integration, performance during volatile periods, and the level of client adoption across various major geographies. Success will depend upon the ability of both parties to execute on their plans in a disciplined manner and grow into new assets and venues. It appears as though both parties are positioning themselves to grow their relationship with traditional finance while continuing to develop and enhance their crypto-native capabilities.