Home Business Robinhood co-founder steps down as co-CEO, leaving Vlad Tenev as sole chief...

Robinhood co-founder steps down as co-CEO, leaving Vlad Tenev as sole chief forward of a rumored IPO


Robinhood, creator of the favored stock-trading app of the identical identify, introduced on Friday that Vlad Tenev would be the firm’s sole chief government, ending an association through which Tenev and cofounder Baiju Bhatt have shared the highest job for the reason that firm’s launch in 2013.

The transfer comes amid ongoing speculation that Robinhood plans to go public within the coming months, and after the corporate raised $660 million in a latest Series G funding spherical.

“At the moment, Robinhood co-founders Baiju Bhatt and Vlad Tenev shared with our workers that Vlad will assume the position of sole CEO. Baiju will proceed in his position as co-founder, supporting key enterprise initiatives and serving on Robinhood’s board of administrators,” stated a Robinhood spokesperson.

An individual near the corporate, who spoke on situation of anonymity, stated the choice to call Tenev as sole chief got here partly as a result of Robinhood acknowledged {that a} dual-CEO construction had turn into much less viable as the corporate expands. The particular person added that the transfer didn’t come about as results of political machinations and that Tenev and Bhatt, who grew to become associates as Stanford undergraduates, stay shut.

In keeping with former Robinhood executives, Tenev is the extra visionary and strategy-oriented of the 2 founders, whereas Bhatt is thought to be extra jocular and centered on product improvement. The particular person near Robinhood stated the brand new association will let Bhatt commit extra time to initiatives he most enjoys.

Robinhood is using excessive after its big funding spherical, which valued the agency at $11.7 billion, and from an inflow of recent customers who’ve helped gas a file stage of buying and selling this yr amongst retail buyers. Earlier this yr, the corporate stated it has grown to 13 million accounts, 3 million of which had been added within the first six months of 2020 alone. The phenomenon led BusinessWeek to dub the mass of recent merchants “Generation Robinhood” in a latest cowl story.

Regardless of the hype, Robinhood faces quite a few challenges. Critics have decried the app as casino-like and exploitive, arguing that it encourages reckless buying and selling. Others have warned that novice customers can simply get in over their head—a degree pushed dwelling in June when a 20-year-old dealer took his life after mistakenly believing he had incurred $700,000 in debt whereas buying and selling sophisticated choices contracts. The corporate has additionally incurred a barrage of buyer complaints and fines from regulators, and bungled main product rollouts.

Whereas Robinhood has turn into a darling amongst enterprise capitalists, it’s unclear when or if it can flip a revenue. The agency doesn’t cost customers to commerce—an innovation that led the remainder of the trade final yr to observe go well with. Robinhood has earned $453 million to date this yr from “cost for order move,” which entails acquiring rebates from market-making companies like Citadel Securities that execute Robinhood prospects’ trades. The tactic accounts for round 70% of Robinhood’s income, elevating questions of whether or not that is sustainable and if the agency will be capable of diversify its income stream sooner or later.

In moving into the solo CEO position, the 33-year-old Tenev will probably be beneath appreciable strain to point out Robinhood is constructed for the long run—strain that can solely improve as soon as the corporate goes public.

In interviews with Fortune, Tenev predicted that the corporate’s younger buyer base (the median age of Robinhood buyers is 31) will develop extra prosperous over time, permitting the corporate to promote them extra merchandise. He additionally described studying broadly to buttress his management expertise—largely biographies of figures like Steve Jobs, Albert Einstein and Howard Hughes, but in addition science treatises like Steven Wolfram’s A Mission to Discover the Fundament Theories of Physics.

For now, Tenev has appreciable runway to show himself due to Robinhood’s fats steadiness sheet and a surge in inventory buying and selling. The corporate’s lead investor, Jan Hammer of Index Ventures, stated by e mail he’s assured Tenev is as much as the job.

“Vlad’s management has been instrumental to Robinhood’s success in reaching unimaginable scale. I’m assured that Robinhood will proceed to steer in constructing revolutionary merchandise and serving prospects as the corporate strikes into its subsequent section of development,” Hammer wrote.

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