As funding brokerage Robinhood finds its footing as a publicly traded firm, its CEO continues to be attempting to determine find out how to stability the platform’s roots in day buying and selling along with his need to construct a sustainable enterprise.
Talking at Fortune‘s Brainstorm Tech conference on Monday, Vladimir Tenev reflected on his rocky tenure leading the 10-year-old company, from startup darling to villain of the GameStop meme stock debacle in 2021. After stock market tumult sent Robinhood’s shares plunging shortly after an preliminary public providing, Tenev mentioned that the platform is lastly reaching its stride. A part of that may be attributed to the corporate’s funding in probably the most risky property: crypto.
Whereas Robinhood has let prospects commerce crypto since 2018, it has moved additional into the house previously couple of years, together with launching crypto buying and selling in Europe and buying the longstanding trade Bitstamp for $200 million in June. Tenev mentioned he sees a transparent profit in doubling down on the sector, which he described as extra than simply memecoins and hypothesis.
“The cost of running a crypto business is an order of magnitude lower,” he informed Fortune editor-in-chief Alyson Shontell on stage, citing the power to leverage open-source infrastructure like blockchains. “There’s just an obvious technology advantage.”
Robinhood will not be the one monetary agency to push additional into crypto-related companies, with legacy firms from BlackRock to Goldman Sachs experimenting with the red-hot area of tokenization, the place property from {dollars} to shares are issued on blockchains. Tenev expressed his bullish view on the sphere, predicting it’s going to signify the “next transition” for monetary providers, because of the power to chop out costly intermediaries like for commerce settlement. “You don’t have to squint too hard to imagine a world where stocks are on blockchains,” he mentioned.
Time for reflection
Whereas Robinhood has stabilized to turn into a number one investing platform for youthful merchants, its future appeared tenuous in 2021, when the corporate stood on the middle of the meme inventory craze. After fueling its rise via dangerous choices like choices, Robinhood needed to limit buyer buying and selling throughout a quick interval of market volatility in January 2021 as a result of capital shortfalls. And as public markets froze in 2022 and rates of interest rose, Robinhood’s inventory dropped as a lot as 90% because it misplaced its core buyer base.
Tenev mentioned the corporate and its shares have been in a position to get better considerably by revisiting its core choices, together with the concept all buyers needs to be handled equally. One change was to supply white-glove service to its energy customers, flipping Robinhood’s core thesis of buyer equality on its head.
The platform additionally transitioned from specializing in energetic buying and selling to diversifying into different merchandise, together with retirement accounts, a bank card, and high-yield money accounts. Nonetheless, Tenev mentioned he nonetheless desires Robinhood to have the ability to compete with different brokerage platforms, and even banks, for every type of consumers, together with high-net-worth people. “The aspiration is for people like me to have all their wealth in Robinhood,” he mentioned.
A part of Tenev’s journey over the previous two years was additionally private, together with reflecting on what would occur if the board determined to interchange him as CEO. Nonetheless, he credited his immigrant background—he was born in Bulgaria—and character with permitting him to navigate the turmoil. “I have this pathological steadiness,” he mentioned. “It can be very off putting to people.”
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