Stock trading app Robinhood has beaten its rival E-trade when it comes to users, doubling the number of accounts in the past year.
The start-up now has 4 million brokerage accounts on its platform. On Thursday, it announced a $363 million funding round, valuing the company at $5.6 billion — quadruple from about a year ago.
New investors included Sequoia, Google's venture capital fund Capital G and Iconiq. DST Global led this Series D round and had facilitated the $110 million round last year, when Robinhood had 2 million users.
One of Robinhood's biggest competitors, E-Trade Financial, which also has a mobile app, had 3.7 million brokerage accounts at the end of March, with an annualized new account growth rate of 6.6 percent, according to the company's most recent 10-Q filing.
E-Trade Financial did not respond to CNBC's request for comment.
Robinhood offers commission-free stock trading through an app it launched about three years ago. In February, it rolled out cryptocurrency trading for bitcoin and ethereum that's now available in 10 states through "Robinhood Crypto."
"Crypto has certainly added to our growth," Baiju Bhatt, Robinhood co-founder and co-CEO, told CNBC on a phone interview. "In the next couple of years, I think you'll see Robinhood looking like a full-service consumer finance company."
The start-up's products, which have done $150 billion in volume since their introduction, tend to cater to the "millennial" population, roughly ages 18 to 35. The demographic is often considered a challenge for traditional financial institutions to reach, and Robinhood is trying to attract the group by offering commission-free trading through an app.
The company generates revenue by taking a tiny fraction of a cent per dollar from each trade order as well as collecting interest on customer deposits. In September 2016, the start-up launched a paid subscription service called Robinhood Gold.
"I think the rate at which more traditional tech companies are disrupting finance is interesting to see," Bhatt said. "As it stands we're leading the pack, we're excited about accelerating that."
For cryptocurrency trading, Robinhood has no investment minimums or maximums and no withdrawal limits. The Menlo Park, California-based company holds most of the digital coins offline, in what is known as "cold storage," to prevent hackers from stealing the coins.
E-Trade and other brokers have been more cautious about cryptocurrency trading, offering access to bitcoin futures but not the digital currency itself.