Obviously I'm speculating but one of the largest investors in Robinhood's last round was a hedge fund. As others have pointed out, Citadel's market making arm

Obviously I'm speculating but one of the largest investors in Robinhood's last round was a hedge fund. As others have pointed out, Citadel's market making arm is their largest source of revenue + Citadel's hedge fund recently invested a large amount in Melvin Capital to help shore up Melvin's capital base after their loss. Unfortunately unless Robinhood insiders leak or post their rationale behind this decision, we'll never really know what happened behind closed doors.