Fortune - USA (2020-12)

FORTUNE DECEMBER 2020 /JANUARY 2021 102

V

LAD TENEV, like so many

CEOs these days, is working

from home. A thin 33-year-

old with jet-black hair down

to his shoulders, Tenev has

joined a video call to discuss

how his company—Robinhood, maker of

the wildly popular eponymous stock-trading

app—plans to capitalize on its recent growth.

But he also has other transitions on his mind.

A father of two, Tenev explains that his younger

child is in the final stages of potty training—a

milestone that feels especially significant given

Tenev’s own upbringing. “When I grew up,

in Bulgaria, there were never enough diapers

available,” he recounts. “So there was huge

pressure to move on from diapers.”

Though he now lives in tony Palo Alto,

Tenev brings up his childhood experience

with Communism frequently, invoking the

economic hardships and deprivations that

the system inflicted. In his view, the failures

of Communism validate Robinhood’s über-

capitalist mission, which is to help neophyte

investors build wealth by buying stocks.

ROBINHOOD’S NEXT ADVENTURE

The startup’s stock-trading app is a runaway hit. But can Robinhood

persuade wealthier customers to trust it with serious money?

By JEFF JOHN ROBERTS

STEALING

( MARKET

SHARE) FROM

THE RICH

INVESTOR’S GUIDE • ROBINHOOD

Robinhood is only seven years old, but its pursuit of that mis-

sion has shaken up the brokerage industry in profound ways.

Its sleek app-based features have made it the go-to investing

platform for people under 40. The upstart boasts 15 million

accounts, according to investment bank JMP Securities, on par

with decades-old rivals like Charles Schwab and TD Ameritrade;

it added 5 million accounts in the first three quarters of 2020

alone. Its rapid rise has forced incumbents to emulate its innova-

tions, most notably zero-commission trading, which virtually all

brokers now offer. And its ease of use and unabashed cheerlead-

ing for stocks have made it synonymous with a new species of

investor dubbed the “Robinhood trader”—a cohort disparaged

by many financial pros, but one whose influence is reshaping as-

sumptions about how to invest.

For Tenev and his 35-year-old cofounder, Baiju Bhatt, long-

term success—including profitability and a public offering—de-

pends on guiding those traders toward auence. Robinhood

believes it can emulate what Schwab did two generations earlier,

acquiring younger customers that the rest of the industry has

PHOTOGRAPH BY WESAAM AL-BADRY