Why investors were willing to write Robinhood a $3 billion check during the GameStop chaos

Why investors were willing to write Robinhood a $3 billion check during the GameStop chaos

Vlad Tenev, co-founder and co-CEO of investing app Robinhood.Brendan McDermid | ReutersRobinhood's ability to add hundreds of thousands of new customers during a week of chaos, along with its IPO prospects, convinced Silicon Valley backers that a multi-billion-dollar cash infusion was worth it.CNBC spoke to three of Robinhood's investors, who agreed to speak about the emergency funding without being named, because the conversations were private. All of them said there was "strong demand" for investors to get a piece of Robinhood, even as the company stared down a public relations and regulatory crisis.The trouble started last week, as Robinhood restricted trading for a list of stocks including GameStop. Amateur investors had bid up those names on social media, causing massive losses for hedge funds that shorted them.Robinhood was not the only brokerage firm to do this. Still, its decision was met with a big backlash from traders and even celebrities on Twitter and Reddit. Some accused the company of colluding with hedge funds to shut down the buy-side of the trade. Lawmakers from both major parties also lobbed accusations of market manipulation at Robinhood. (Robinhood CEO's Vlad Tenev said it did not make the move because of any outside pressure.)But