Fintech Trailblazer: Vlad Tenev, the man behind Robinhood
In 2021, Robinhood hit the headlines for all the right reasons. The investment brokerage house, which mainly catered to armchair investors looking for small but lucrative funds, literally almost broke Wall Street.
Retail investors had flocked to Reddit and then used the e-commerce app — among others — to launch their offensive following a GameStop stock-buying frenzy.
The share buying surge followed calls to action on Reddit’s wallstreetbets and was then facilitated via online trading portals – including the commission-free stock trading and investing app Robinhood.
GameStop’s stock price rose as the cheap stock was shorted by hedge fund giants who jumped on what they saw as an ideal opportunity to profit from a dying company.
World leaders watched in amazement as the incident unfolded – resulting in then-British Prime Minister Boris Johnson and US President Joe Biden making public statements as the situation escalated.
Within hours, the armchair traders were curtailed, with Tenev criticized for his handling of the matter, which admittedly saw him acting in the interests of Wall Street rather than his own network of renegade investors.
The GameStop stock debacle was a David and Goliath moment for the giant hedge fund operators of the world’s busiest stock exchange, and the aptly named Robinhood has become synonymous with the power and potential fintechs can bring to the little guy.
A mathematical mind
Originally born in Bulgaria, European native Vlad Tenev moved to Washington DC at the age of five with his parents, who were both employed by the World Bank.
Given his origins, it is hardly surprising that young Vlad had a talent for numbers. He attended Thomas Jefferson High School for Science and Technology in Fairfax County, Virginia, and proved to be an excellent student, excelling in both mathematics and computer science. In fact, before entering investment platform exchanges, Tenev also earned a BSc in mathematics from Stanford, and even launched two fintech startups.
After graduating with honors from Stanford, he decided – along with his friend and roommate Baiju Prafulkumar Bhatt – to try his hand at building a finance company.
The duo’s first project, called Celeris, created software for high-frequency trading (HFT). But despite their enthusiasm, they dropped the project and decided to build a second one, called Chronos Research.
Chronos sold low-latency software to major investment banks and trading firms—and showed signs of success until 2012, when it abruptly shut down that business as well. Tenev then turned its attention to an unfulfilled area of the market where demand was increasing – namely the consumer domain.
Essentially, he and Baiju decided that the younger population, while interested in entering the stock market, did not have a platform to cater to their needs.
Tenev creates an investment app
The first step in addressing the gap in the marketplace was to design a portal that would be easy for young people to relate to as well as use.
Tenev, who also had some technical experience, decided to design an app that would form the basis of their brokerage platform. The company’s name comes from its co-founders’ mission to “give everyone access to the financial markets, not just the wealthy”.
The idea was that their brokerage would offer commission-free investment and trading opportunities in ETFs, stocks and cryptocurrency, thus making it an attractive prospect for retail traders.
He and Baiju published their app on the AppStore in 2014, but helped an official company launch in 2015.
Robinhood’s rise to success
The project proved an unmitigated success. Both Tenev and Baiju took on roles as co-CEOs and co-founders.
Due to its simplicity and efficiency, Robinhood grew its user base from 500,000 to 22.8 million in less than a decade. Today, the app has 3.23 million monthly downloads and is one of the largest e-commerce apps globally.
Robinhood has also raised $6.2 billion in funding over 27 investment rounds. The company’s last capital increase took place on 13 May 2022 from a secondary round after the IPO.
A family man
Despite the money and fame, Tenev enjoys a relatively grounded existence, having married his college sweetheart, Celine Tenev. The couple have a daughter, born in 2017, and live in Palo Alto, California.
