Baiju Bhatt and Vladimir Tenev, Gen Z’s Preferred Brokers
Robinhood added 3 million accounts in the first four months of 2020 as millennials and Zoomers stuck at home flocked to the stock market.
Since the Stanford pals founded it in 2013, Robinhood has been about lowering barriers to investing. It offered free trades before that was industry standard, along with no minimum balances and an app-focused approach that made buying shares as easy as ordering a burger on Seamless. So it was perhaps no surprise that as equity markets collapsed and then recovered, millions of newly minted traders—many with $1,200 stimulus checks— logged on. Their Jim Cramer was Dave Portnoy, founder of the irreverent Barstool Sports Inc., who livestreamed his profanity-laced trading sessions and rooted that “stocks only go up!” (Portnoy has no formal relationship with Robinhood.)
A September funding round lifted Robinhood’s valuation to $11.7 billion. It had more than 13 million accounts as of then and expanded from about 600 employees in late 2019 to more than 1,000 this fall. Although the trading frenzy was good for business, Robinhood ran into trouble, too. Consumer protection agencies got roughly four times the number of complaints about the brokerage as some of its peers in the first half of the year. The company also drew regulatory scrutiny for its handling of an outage in March and over whether it properly informed clients about how it completed customer orders. “We strive to maintain constructive relationships with our regulators and to cooperate fully with them,” a Robinhood spokesperson said in a statement in September.