Pod Insights Equity Podcast Robinhood’s 'comeback' and big plans for 2025 with co-founder and CEO Vlad Tenev About this episode Instead of our usual Friday news rundown, we’re bringing you a conversation about what Yahoo Finance dubbed the “comeback stock of the year” - Robinhood. TechCrunch Editor in Chief and General Manager Connie Loizos chatted with Robinhood’s CEO and co-founder, Vlad Tenev, about the company’s evolution.
Listen to the full episode to hear more about:
Why Tenev believes the company is poised for significant growth.
Robinhood's approach to prediction markets, sports betting, and wealth management.
How the Robinhood plans to empower a younger generation of investors.
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Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Anthony Ha? This episode of Equity is brought to you by Schneider Electric. Schneider Electric, your energy technology partner.
0:17 Kirsten Korosec? Hello and welcome back to Equity, TechCrunch's flagship podcast about the business of startups. I'm Kirsten Korsak, and instead of our usual Friday news rundown, we're bringing you a conversation about Robinhood, a company that Yahoo Finance dubbed the comeback stock of the year. TechCrunch editor in chief and general manager Connie Loizos chatted with Robinhood's CEO and co-founder Vlad Tenev about the company's evolution, its mission to empower a younger generation of investors, and why he believes the company is poised for significant growth through its approach to prediction markets, sports betting, and wealth management. Let's take a listen.
0:59 Kirsten Korosec? Congratulations, I just saw that Robinhood was marked Yahoo Finance's comeback stock of the year.
1:04 Speaker 02 Yeah, we were happy about that. I feel like the Robinhood story, when we were a young company and we just got started, everyone was kind of rooting for us, you know? And then, at one point, we started being treated like an incumbent in the sense that probably 2018, 2019, ironically, right after the whole industry dropped commissions to zero, the vibe around Robinhood became negative. And then I think during COVID, it became just strange. I wouldn't call it positive or negative. It was like Robinhood was growing like crazy, but people were unhappy. I think we hit our low and now it's been very positive, so.
1:40 Kirsten Korosec? It's really great. Yeah, I mean, I won't ask you about all the meme stuff, but that was, of course, not. I'm sure that wasn't really fun.
1:45 Speaker 02 It was not the most fun.
1:47 Kirsten Korosec? Yeah, yeah, I'm sure. So the comeback stuff is great. And also, I was looking back at when I had interviewed you, again, I think in, it's like 2018 or 2019, and you had just raised your CRC, and it was a $1.3 billion market cap, and now it's, I guess, $32 billion as of yesterday. One in 10.
2:01 Speaker 02 It was even higher on Monday.
2:03 Kirsten Korosec? Was it?
2:04 Speaker 02 I think the market didn't take kindly to Jay Powell's comments. So we were hit hard, as were many others.
2:12 Speaker 03 I guess you just can't, you can't look at it every day.
2:14 Speaker 02 I never look at the stock anyway. Yeah, I don't, I don't even know about this. This is just what they tell me.
2:19 Speaker 03 Hopefully your employees have gotten used to not looking at it every day too. But I didn't realize one in 10 Americans now have a Robinhood account, which is crazy. And you have a quarter of a percent of the total retail assets in the US? Is that right?
2:31 Speaker 02 Well, I haven't heard that stat. I mean, it's not, it doesn't sound crazy to me. I mean, there's trillions of assets. Robinhood's right around 200 billion. So we've still got a long ways to go. I mean, it's still a very, very small company. Objectively, I think we're bigger than when we started, but you know, some of these guys like the Schwabs and the Fidelities have 10 trillion assets. So we're still growing, but our assets are growing 40% plus year over year rather than 2 to 3%.
3:00 Speaker 03 So. Incredible. How big a company is it from an employee standpoint, roughly?
3:05 Speaker 02 Depending on how you count folks that are part-time, I think somewhere between 2 and 3,000.
3:11 Speaker 03 Okay.
3:11 Speaker 02 Yeah.
3:12 Speaker 03 Do you have any idea how big a Schwab is?
3:15 Speaker 02 I think they're much bigger.
3:16 Speaker 03 Okay.
3:16 Speaker 02 Yeah, much bigger, probably tens of thousands.
3:20 Speaker 03 Never given it a thought until just now, but also one thing I wanted to ask you, you were the co-CEO last time I talked to you. And of course you've been the CEO for a while, but what was that transition like and how's that going?
3:31 Speaker 02 Yeah, I think we made that transition in 2020. So it was about four years ago. I think really what it was, was we were talking about going public and my co-founder just realized that I don't think he wanted to like, deal with as much of the public company stuff at that time and wanted to focus on just designing things and building great products. And so for a while, he was chief creative officer up until earlier this year. And then earlier this year, he basically just stepped back to the board and started another company in the kind of aerospace, space exploration industry.
4:08 Speaker 03 Yeah, very interesting. Big pivot. So when we sat down years ago, a series C stage company, much smaller, but from then you were like, this is going to be like a big financial services company that does everything. And of course, you've moved into wealth management, credit cards, lots of other things. Just because it's been much in the news, I wanted to spend like a second talking about some of the new things and learn more about your roadmap. But prediction markets, that was of course, like very much a headline leading up to the election. Can you talk a little bit about how you're thinking of that? How big an opportunity you think there is there?
4:42 Speaker 02 Yeah, I've been a big fan of prediction markets for a long time and it became clear, at least to me relatively early on, that political contracts are kind of the ideal product in that space. Because it's very newsworthy, highly correlated to market performance, so useful as a hedge. And the one other thing was everyone watches the polls and kind of the early results on election night to figure out what's going on. And if you're watching the news, the picture they paint is very unclear, right? It's like these polls are closing in this county over here and maybe they've already closed here.
5:21 Speaker 02 And you know, they're, they're doing all this math for you and tabulating, but they're not really telling you what the odds are of one candidate or, or the other winning the election. And you contrast that with the prediction markets. A lot of people talk about whether they're accurate or whether they actually predict the event. But I think what's even more powerful is just distilling where things stand right now, based on all the information that's out there, who's winning the election as of now. And I think that's a very useful use case, not necessarily for prediction itself, but really for the news. If you want information as fast as possible about what's actually going on, I think prediction markets are really good.
6:00 Speaker 02 So we, we got excited about that. We didn't think it'd be possible to launch them for this election because, you know, there was the lawsuit with the CFTC. They, Calci prevailed kind of in the 11th hour and there was a stay that was lifted also at like 11:59 PM, right? And so the team mobilized, we put a lot of great people on it and we went from intending to launch to actually shipping to 100% in about two and a half weeks, which, which I think was crazy and speaks to the culture and the product velocity we've built at Robinhood.
6:32 Speaker 03 Can I ask, did you ever talk to Calci about potentially buying it?
6:36 Speaker 02 I've talked to Calshi, not about buying it, but actually, we ended up working with Forecastex as our DCM provider. And this is a little bit technical, but we're a CCM, Futures Commissioned Merchant, which is kind of like the customer-facing part of futures or swaps dealer. And so, we need to rely on an exchange functionally to serve as the backend of all these trades. And we ended up using Forecastex because they had all the licensure to be able to do that. My understanding, Calshi is only able to offer it to retail directly, not able to serve other FCMs.
7:13 Speaker 03 Oh, and really interesting. I'll have to look into that a little bit more so I understand it better. And then I think I read somewhere that you indicated that a move into sports could take the form of event contracts.
7:23 Speaker 02 Yeah, I mean, I think that was taken a little bit out of context. Certainly, our focus is on regulated, federally regulated event contracts rather than traditional sports betting. Right now, event contracts do not permit sports outcomes. That might change. You know, there's going to be a new CFTC commissioner. A lot of people are interested in sports entering the federally regulated realm. I think those products would look very different than traditional sports betting. But yeah, our focus is on event contracts. And I think that's going to be a big thing. I mean, just the presidential election market proved to us that there's a lot of demand for these types of products.
8:03 Speaker 02 We had over half a billion contracts traded in about a week. There was a ton of interest. Over half a million people traded them. The number one thing we were hearing afterward was, can we have more contracts? Can this be like a more fleshed out product and not just for the election?
8:17 Speaker 03 So obviously, sports would be huge and sort of perennial. But other types of contracts, just because I'm having trouble believing of what else?
8:23 Speaker 02 There's a lot of possibilities. I think a natural fit for Robinhood is economic ones. So we've already done political, but economic contracts are interesting to us. You can see some examples of Fed hike, Fed drop, prediction markets, and those tend to convey interesting information. Anything that's kind of at the intersection of news and financial markets is interesting. Interesting to us. In my opinion, like news has increasingly started to merge with entertainment in the past few years particularly. And I think in that world, there's a little bit of a gap filled in timely news. And so really, I think event contracts, there's two ways to look at it. One is as an active trader asset that
9:05 Speaker 02 active traders like to trade alongside options and futures and other things. But the other is as a passive experience where if you just want the news, event contracts can be a way to deliver that to you in real time. So we're also thinking about this, and I think that opens up a broader set of of possibilities. I mean, you can have event contracts on pretty much anything from like the Oscars and entertainment events to sports to to politics. And the categories of event contracts almost become like sections of a newspaper, right? Art, style, leisure, sports, business, front page, you know, and which is real time. So you can imagine the actual like digital equivalent of a newspaper being delivered via event contracts.
9:48 Speaker 03 So a smaller opportunity, I think maybe smaller, it seems smaller, but also interesting and I'd never heard of before, at least certainly a startup doing it, is Dub, a copy trading platform. And I wondered what you make of copy trading?
10:01 Speaker 02 Yeah, copy trading has been in the regulatory crosshairs for a while. I think the main issue with copy trading, at least in the US, is that if you're making a recommendation, the broker takes on some duty for that. It's almost like it takes you out of the realm of self-directed into essentially providing advice. And I think that's been the difficult part about it. You know, we want to be a self-directed platform. Some customers do express interest in being able to copy other traders on the platform and doing things like that. But ultimately, I think what's been difficult for us to square is how is that not providing financial advice?
10:44 Speaker 02 And maybe there's a way to do it. I don't really know this business super deeply. But I wonder if like their small size is somehow responsible for them not being in the in the magnifying glass as much as a Robin Hood would be.
10:58 Speaker 03 Well, this is a little bit of field, but I did notice that a co-founder, I think he was described as a co-founder somewhere, but I think he was the founding COO of Robinhood, was involved in the funding of this startup earlier this year, seventeen million dollar on. And it just made me wonder, I don't see your name associated with things. I imagine you're very busy, but I did wonder if you personally invest in things.
11:18 Speaker 02 I do from time to time, not very much, because I tend to be conflicted out of a lot of the things that people would want me to invest in, right? But I do invest in things from time to time. And actually, about a year ago, I started another company in the AI space, which is basically AI research lab that's focused on solving difficult math problems. And so I think my relationship there is more than just a passive investor. I started it and I'm chairman of the board and we ended up raising seventy five million from Sequoia a couple of months ago. But I think aside from that, I don't have a ton of time, so I try to stay focused on relatively few things.
12:00 Speaker 03 Yeah, well, so it's interesting. Obviously, AI and math don't get along all that well, at least in terms of.
12:06 Speaker 02 Not currently.
12:07 Speaker 03 Can you just talk a little bit more about that? Why did you feel that you needed to solve this with, obviously, that your co-founder and CEO, whose name I'm forgetting right now?
12:15 Speaker 02 Yeah, his name is Tudor, Tudor Akim. And he formerly started a self-driving technology company. So they were kind of building like the Android of Tesla Autopilot and making it available to OEMs. So he had a lot of experience in the space before. I guess the genesis behind this problem was I was interested in physics and math when I was a kid. I actually pursued a math PhD down at UCLA before dropping out and going into the business world. And I think the interesting thing about math to me is it's sort of like universal language that you can use to figure things out.
12:53 Speaker 02 And where that fits into harmonic is, you know, there's a big goal of building AI models that can reason, that don't hallucinate, that actually can take logical steps and generate conclusions. And to me, that's just math. Math is. Already provided a language to talk concretely about various things. And so if we can build AI models that can do math really well, that's tantamount to building AI models that can reason well. And they should be able to solve all sorts of problems and also determine when they can't solve a problem and communicate that to you rather than just making stuff up. So that was the genesis. And we we noticed that GPT four and other models provided a starting point, but we're not quite there yet. I mean, they were hallucinating.
13:38 Speaker 02 They were not great at doing calculations and other math operations. And so we we thought that a different approach to solving the problem might actually prove to be valuable. And so what we did was we actually took some of the ideas behind Alpha Zero, which was Deep Mind's model that got really good at playing chess and kind of translated them to math and implemented them.
14:00 Speaker 03 And so obviously you're optimistic about this. I think I saw some math with, I think a UCLA professor basically said like, well, we'll never get there. Like, it'll always be a tool that helps humans scale, but will never necessarily be able to figure out like the complex questions of the universe.
14:16 Speaker 02 I don't necessarily disagree. I mean, I think that humans should be calling the shots and will likely be directing, at least for the foreseeable future, the research directions in math and science and trying to figure out what are the interesting problems to solve. But that's not to say the job of a mathematician will not fundamentally change. I think it will. And, you know, I talked to a lot of my friends and colleagues who are in academia doing math professionally. And I kind of asked them, like, are you worried about this? The AI might just start doing all the things that you're doing. And one of them said something interesting. He said, well, if you look back at the 1800s and 1700s,
14:59 Speaker 02 the job of a mathematician was to solve like really complicated equations. So they would basically like add really big numbers or solve quadratic equations. And then obviously we created ways to do that more efficiently without having humans' time. We invented calculators and babbage machines. And so what happened mathematicians? Didn't go away, but the job description kind of changed and it became a little bit more abstract. So I think you'll see that a similar thing like humans will be directing the research, but I don't think they'll be completely out of the loop. I mean, some of them might be if you're a grad student and you're actually like doing smaller problems in service of a professor. I think the AI would be able to complete a lot of those. Yeah, I think I'm pro human.
15:43 Speaker 02 I think humans will still be calling the shots for a while.
15:46 Speaker 03 Is there a way for Robinhood to work with Harmonic?
15:49 Speaker 02 Eventually, yes, I think that's not really the focus because right now Harmonic is just trying to build the best math model. And eventually, when it comes time to productizing it and turning it into actual commercial products, there could be opportunities there. I think one of the things we've been thinking about is one of the things that's very similar to math is software. So when you're writing computer code and programming applications, at the end of the day, it's just math. It's like algorithms and subroutines. So there's a lot of similarity. So if you can actually prove things about complex math problems, you should be able to not just prove things about programs and applications,
16:32 Speaker 02 but generate programs and applications that are verifiably correct. And I think that's a big deal in areas where safety and reliability are critical. And Robinhood is in a bunch of those areas. I mean, financial services is a safety critical domain. If you look at blockchain, smart contracts, or even like traditional trading systems where small errors can lead to losses of millions of dollars. I think those are all use cases for formal verification, which is something that Harmonic is focusing on.
17:04 Speaker 03 Okay, well, I'll be eager to see how things evolve. It kind of reminds me a little bit of, you know, Sam Altman has obviously interest in a lot of companies that can very easily work together in the future.
17:13 Speaker 02 Right, yeah, there's an economy for sure. I'd say that would be a good outcome, hopefully for everyone, but it's not necessarily the outcome that we've like started with. Yeah, it's it's really just about can we get better at solving math problems? The overlap initially with Robinhood is small and it's a completely separate thing. But over time, if it gets bigger and Robinhood gets bigger, it's a good scenario if there is some overlap because that just means both are growing and having success.
17:42 Speaker 03 Right.
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18:16 Speaker 03 So you mentioned blockchain. Let's talk about crypto. Another big product for you or another big opportunity for you. How are you thinking about that? I mean, obviously, there's so much change happening in Washington to your earlier point. Howard Lottick is coming in as Commerce Secretary, Paul Atkins, new SEC chief. There's a bill that people are trying to pass to move, I guess, control over the industry from the SEC to, what is it, the commodities future?
18:43 Speaker 02 CFTC, yeah.
18:44 Speaker 03 Exactly. So how are you thinking about all those things? I presume you are thrilled.
18:50 Speaker 02 I think it's a big improvement over the status quo, which is basically regulation by enforcement and broad scale, just, I think I've heard it called carpet bombing the crypto industry in the US. And I think that hasn't been good. So sensible regulation where the government and industry are working together with the end goal of making the US number one in crypto worldwide, I think is much preferable. Yeah, unfortunately, this is one of the areas where Europe's been ahead of us, oddly. I mean, it's like you look at the approach to AI regulation in Europe and you kind of look at it sideways, but with crypto, they've kind of embraced it. And there's rules of the road for conducting an ICO, for listing tokens, for doing crypto
19:35 Speaker 02 derivatives. And I think the US will get there. I was kind of prepared for that to take longer, but I think now there's a lot of optimism that it could be done in the next year, which I think is great for the industry and great for consumers ultimately. And I guess you can ask, why is it great for consumers? I think there's two things. Like, one side of it is Crypto is an asset, just like other assets that customers want to trade. But I think the other interesting way to look at it is I think crypto is the next in line in a long chain of technology innovations that have changed the underlying infrastructure of the financial system in a positive way. So we started with filing cabinet, pen and paper for doing our finances.
20:20 Speaker 02 Then it went to mainframe back in the seventies and eighties. Then it went to like on premise infrastructure and then cloud. And I think blockchain's next in line as the evolution of that where everything's been digitized, it's on the cloud, but a lot of the actual business logic that used to be done by centralized, large, brick and mortar organizations will now be done by software on public infrastructure. So you no longer need transfer agents, clearing houses replaced by software. Payment processors are also done by software and everything becomes interoperable. So in the same way that, you know, you can send a crypto, a dollar stablecoin from your MetaMask wallet to your Robinhood wallet, you should be able to send any asset using
21:05 Speaker 02 that same infrastructure. And right now it's like very, very difficult to send assets from one broker to another. For example, if you want to transfer your stock from your discount broker to Robinhood, they don't make that process easy. There's no standards. It takes multiple days and it's kind of a scary process. You basically like see your money disappear from one place. It's in the ether. You're kind of like talking to customer support. Sometimes they make you sign things in person and you know, that can just be cleaned up. I think that there's no incentive to clean it up right now. And crypto technology provides a huge benefit there among so many other things.
21:42 Speaker 03 And do you think money is eventually safer? I think the big fear has always been, you know, cyber attack. Your money still is sort of, you know, theoretical in some ways. I just wonder if you think there's this sort of, you know?
21:55 Speaker 02 I think the safety of money is independent of whether it's in crypto form or not. I think that right now a non crypto dollar cannot really Be self custodied unless it's in the form of cash. So basically, you know, if you've got money in a bank account, you can be cut off from that at any moment, which, you know, there's, there's been definitely some concern and some activity around this whole de-banking notion in the past few months, where if the bank doesn't like what you're doing, it could be negative news on you on the internet or so many other things. They could just shut off your account. And I think with self custody, the reason it appeals to people is as long as there's the internet
22:38 Speaker 02 and the blockchain's running, I have access to my assets and nobody can take that away from me. I think that's a very powerful thing for individual liberty. Now, not all people actually care about this or even value it. Some people like the idea of their money and their assets being centralized and held at an exchange or a broker. They hold it at Robinhood. And we work very hard to safeguard that. And I think in the future, at least, someone that's holding their assets in a centralized provider, it'll almost be indistinguishable in terms of the protections that you get from one asset to the next. Because, you know, companies want to take care of their customers.
23:20 Speaker 02 It would be a hugely brand destructive event if money just disappears. That would be the end of a company. So it's in everyone's incentive to do right by customers and safeguard the assets if they're in our custody.
23:31 Speaker 03 You know, I also wanted to just ask quickly while we're talking about government. I did see the Robinhood, along with, I guess, OpenAI, Meta, others, is donating to Donald Trump's inauguration fund. And I was waiting for somebody to up the ante. I was like, a million dollars, a million dollars on Amazon.
23:46 Speaker 02 Why isn't anyone doing more?
23:47 Speaker 03 I'm like, when is somebody gonna give more? I'm like, can stand out a little bit. So there suddenly you were. But can you maybe talk about, I guess, what that donation represents or what the driver was? Because everyone's, of course, talking about everyone kissing the ring.
23:59 Speaker 02 Yeah, I mean, I think that it's really for us a show of support with the policies, the stated policies of the incoming administration. I mean, it's no surprise, it shouldn't be no surprise that I was not very happy with the existing administration. I mean, the way that they've handled the crypto industry, I think, has been bad, not just for our business, but also for people and for Americans. The entire industry and customers, I think, suffered from that. And so when it became clear that the Trump administration was coming in and they were going to take the presidency and that Republicans were going to take the House and Senate so they would have all three, you saw the markets react to that.
24:41 Speaker 02 Futures markets started booming, equities in 24-hour market were booming as well, cryptos were reacting. And I think that's a signal that the markets really liked what the new administration was standing for, which is a sensible regulation, really. So we wanted to come out in support of that. And in terms of the amount, I would say, when I do things, when Robinhood does things, some people just want to not stand out and be part of the pack and not really like make statements one way or another. But, you know, we like to move with conviction and I think that that was the reason behind the larger, larger amount.
25:19 Speaker 03 I think it was smart. I also wanted to ask you quickly about Trade PMR, a $300 million acquisition. So this is a custodian used by financial advisors to help manage their client accounts and portfolios and handle transfers and trades. I was just reading about this. There reportedly are not that many of them custodians like this in the wealth management industry. This company services or serviced some 350 financial advisory firms. How did this deal come together? Because I see it's, you know, in Florida, a little bit off, but tell us a little bit about that.
25:50 Speaker 02 We were very interested in this general space for the past few years. And we've actually talked to a lot of companies. The reason why we were interested in it is if you look at how to expand what we're doing, take the infrastructure that we've built to offer retail trading to individuals and Build upon that, there's a couple of business angles that are interesting and that there's like a well-developed market for. One of them is 401k administration. So we could go in to help businesses and startups service their 401ks and help their employees invest for retirement. We're already in retirement. We have a great IRA product that's been growing tremendously quickly.
26:34 Speaker 02 That's kind of a natural business-to-business expansion point, right? So it's one that that we've considered. There's employee stock plans. You know, if you're an employee of a public company and you have 10B51 plan or you're vesting into rewards in the form of stock, there's a market for like helping employees and companies manage that. So that that's another one. Then the third one is serving advisors. These advisors are entrepreneurs themselves. They're out there getting customers. Those customers are putting assets with them and and they're growing and they're managing their money. And I think when we looked at all three of these things, I think the most interesting opportunity was serving advisors. I think that customers want it.
27:15 Speaker 02 Some customers, particularly as they increase in net worth, really want someone to help manage their financial lives holistically and look at not just the portfolio allocation, but their insurance needs, their budgeting, their wealth management, their multi-generational needs and handle the finances of their kids or their parents in some cases. I don't think existing solutions did that well. And if you look at it as a business, RIA platform has three levels of compounding, three ways in which it grows assets. And ultimately, that's how you measure the value of a business like Robinhood. How how fast can we accumulate assets over time? And an RIA custody business has three of them, whereas Robinhood self-directed only has two.
27:58 Speaker 02 So one of them is customers just make more money over time. As you get older, your net worth tends to increase because you have more years of earning and salary and investment returns that compound. So that's one. The second is we can just get more customers. We recently announced we've got 25 million customers. All else being equal, if we continue to grow and Double our customer base assets on the platform will grow. And then an RIA platform has the additional one of more advisors. The more advisors we plug in, the more they work to get customers. The more of those customers end up accumulating more assets as they get older.
28:35 Speaker 03 Right.
28:35 Speaker 02 And so all else being equal, the compounding effect of asset accumulation is even greater in that business. That's what gets us excited about it. And you talk to these advisors, the technology is even worse than before Robinhood entered the self-directed market. They are excited about the idea of an app that updates your holdings and balances in real time. And so there's a lot of low hanging fruit there. I think that we don't need to do much to make a significant dent in that market.
29:04 Speaker 03 Well, it's interesting. I did see separately that you think that there's going to be three stages of AI adoption by Robinhood. And first it's helping employees inside Robinhood scale up their work internally, like using AI for code review. Then it's augmenting existing products that your customers use. And then finally, you aim to have fully autonomous financial agents that do the job that certified financial professionals do.
29:28 Speaker 02 I think that's basically right.
29:30 Speaker 03 Yeah.
29:30 Speaker 02 But maybe with one distinction. I think when it comes to advisors, a lot of these advisors that are plugging into trade PMR. And I would think about trade PMR as a marketplace. They connect customers on one hand with advisors. These advisors are entrepreneurs. They have businesses. They're excited about AI in the same way that other businesses are because it allows them to serve more customers with lower overhead. So I think that AI technology is going to continue to improve. But I think humans will continue to be in charge and directing it. So I think if we're worried about AI replacing entire businesses, then I mean, the entire world is going to change. And I think we're pretty far from that.
30:15 Speaker 03 It's kind of, I mean, I mean, obviously there will be fewer financial planners needed because they'll be scaling so much. What blows my mind now is how many customers most of these people have as it is. It's always like, you know, thousands. I think it's kind of astonishing. I did want to ask quickly, you might've seen today Fortune published a story that the employees of that company. And I'm not sure how many there were, hundreds maybe?
30:37 Speaker 02 Yeah, around there.
30:38 Speaker 03 Were offered, quote, exploding employment offers, giving them two days to accept their contracts. I wondered if you saw the article and had any thought about the way it's framed? You know, the story does say that these employees who were paid hourly previously will receive salary and equity. And I guess the phrase, no good deed goes unpunished came to mind.
30:59 Speaker 02 I, I think the framing made it sound not great. And I think the reality is like, it's a, it's a free country. Nobody can be forced to work anywhere, right? And so I think it, it made it sound like they had no choice. But of, of course, customers and employees have lots of choices. It's a very, very competitive market. And at the end of the day, we think Robinhood's an amazing employer with, with an amazing culture. And I mean, though, part of the reason why we got so excited about Trade PMR was the team and the, the folks that we met were really amazing people. I've had a chance to spend time with, with a lot of them. And close to everyone from the company ended up getting offers to join Robinhood and kind of continue the journey.
31:42 Speaker 02 Yeah, which, which I don't think was emphasized in that article that.
31:45 Speaker 03 Well, in fairness, yeah, they said only two people didn't get offers, which I thought was pretty astonishing. So that's.
31:51 Speaker 02 Yeah. So, so we, we really take it very seriously. I mean, and we know that when people are deciding to join Robinhood and particularly if there's like merger and acquisition, you know, that's a time of great change. But I, I think one of the things that's worked well for us is we've been able to bring in talented people in the past and have them do extraordinary things here. I mean, for example, X1 acquisition, which we did last year, was a small credit card startup. That team became the core of the Robinhood Gold credit card offering. And now, you know, the scope is, is expanding. Yeah. And so one, one of the things we really strive to do is, is make sure that people can come in here,
32:32 Speaker 02 whether through hiring or acquisition and can really do some of the, the best work that they've ever done and be proud of what they build. And I think that with Trade PMR, we, we'll have the same approach.
32:44 Speaker 03 I read somewhere, I guess, tracks and data that you've done 10 acquisitions, I guess, ever? Is that right?
32:52 Speaker 02 That sounds ballpark, right? Yeah, yeah. I haven't really kept up with the count, but most of them have been small acquisitions. We've done a few larger ones.
33:00 Speaker 03 Yeah, they said the average acquisition amount was 118 million, I guess, based on what you've disclosed. All of them have been in the UK and US, so I was wondering what your plans were to expand to India, Asia, elsewhere.
33:13 Speaker 02 Well, Bitstamp, which we got into an agreement to acquire earlier this year, is licensed in many markets. I think they have something like 30 licenses worldwide. European headquartered in Europe, but really global footprint serves a broader market there. And I think my general philosophy with international is I'd like Robinhood to build the hub. You can think of our business as a lot of really important infrastructure that's at the core of all the products that we offer. So accounting systems, payment systems that move money and assets from account to account. And that forms the core of what we do. And I'm reluctant to acquire multiple cores and staple them together.
33:56 Speaker 02 But things that are sort of at the spokes and that we could plug in and offer to all of our customers, whether they be in the US, UK, EU, or Singapore, which we just announced going live into next year. I think that's the right strategy for us because a lot of other companies expand primarily through acquisition. And you end up with a problem of having to integrate these completely different systems. And then it's a problem because when you ship something in one market, it takes a long time for it to get to other markets because it's just incompatible. And then you're ending up dealing with these costly integration projects that drag on over multiple years. And it just slows you down. It affects the product velocity.
34:41 Speaker 02 So we fundamentally take a different approach to that.
34:44 Speaker 03 Yeah, build versus buy. I'm just wondering, is there anything on the roadmap that we haven't discussed? I mean, obviously, as you've mentioned, you've got so many opportunities.
34:51 Speaker 02 Oh, yeah, there's one thing.
34:52 Speaker 03 Oh, yeah, yeah.
34:53 Speaker 02 There's one thing that I shouldn't mention. So we had an active trader event. It was called Hood Summit in October in Miami. And we launched a bunch of active trader products, futures, index options, and Robinhood Legend, which is our desktop platform purpose-built for active traders.
35:10 Speaker 02 And actually, the team's been iterating post-launch. It's done very well. Customers love it. But the team's just been shipping new things every week. And so today, we're actually shipping crypto on Robinhood Legend. Originally, this was slated for 2025. We decided to like push hard to try to get it done by the end of the year, given how much heightened interest there is in crypto now. So we're launching that. And we're also launching direct exchange integration to coincide with this. So before, we used to route your orders via market makers and you wouldn't, you wouldn't access the exchange order book directly. But now that's changing with crypto on Legend, which is something that active traders have been, have been asking for for a while. So we're excited to be able to deliver that.
35:52 Speaker 03 That's great. Of course, that raises a question for me, which I know you get asked a lot, which is, are your products sort of, you know, too simple for some people to use? The gamification, are you creating, you know, are you helping to usher in a generation of people that are, you know, trading too quickly and thus dangerously? I mean, I guess, who are these active traders to remind?
36:13 Speaker 02 Yeah, I would say active traders are like the technology enthusiasts of our space. They care about having the best tools. They want to be able to trade quickly and efficiently with low latency. They want to customize their interfaces. So imagine, I guess, the stereotypical active trader is someone with like three screens. And like, uh, you know, they're manning the turrets. We love our active traders. We want to be number one in that market. And that involves new innovative products like 24-hour market, offering the whole suite of asset classes and capabilities like index options and futures. And also continuing to make sure the pricing is, is industry leading.
36:55 Speaker 02 You know, one of the things that I tweeted out earlier today was the Fed rates went down, which is a negative thing for people earning interest, but also a very positive for margin lending, which active traders really love. And Robinhood has the lowest margin rates out there. So right now, we're number two in the space. We're winning on mobile, but we're sort of like catching up quite a bit on desktop.
37:17 Speaker 03 Who's number one in the space?
37:19 Speaker 02 It's Schwab, the Schwab TD combined entity. And we, we think we can get to number one by the end of the decade across all of the assets that we offer. So that, that's really the goal.
37:30 Speaker 03 And you, you do have a very different demographic, though, still.
37:33 Speaker 02 Yeah, I mean, the typical Robin Hood customers in their 30s. So I think, you know, it's almost like some reports are like that we're serving children. But, you know, these are grown adults, 30 to 35 average age, younger than, you know, typical customers of incumbents. And we're also interested in being relevant for the next generation. We don't want to just be stuck in what's working for millennials. We're always making sure that the products work for younger people as well. Yeah, active traders, my analogy for an active trader is it's something like a motorhead, someone that's like into F1 and high-performance driving and vehicles.
38:13 Speaker 02 It's a more niche market, but those folks are at the frontier of technology and innovation and motorsport. And in the same way, active traders are going to be at the forefront of technology and innovation in financial services. Even though there's not so many of them, I think making our brand and the identity of the company more sophisticated and performant and emphasizing the tools and functionality will actually serve all of our customers, even those that don't trade.
38:41 Speaker 04 And can you just quickly address like the safety mechanisms?
38:44 Speaker 02 Yeah, I mean, of course, there's suitability, like not everyone is suitable for active trading products like options and derivatives and margin. Those tend to have to do with your risk tolerance. So we have to comply with all of that. Yeah, but at the end of the day, I think the principle is if there's something that an institutional investor has access to and a very sophisticated investor, a high net worth individual, we want to make that available to retail as well, obviously within all relevant rules and regulations. But we do believe that active trading is a real need in a large market that we'd like to compete with and win.
39:24 Speaker 04 Well, listen, Vlad, so nice to talk to you. Thank you for all your time. I really appreciate it.
39:30 Speaker 04 Equity is produced by Teresa Loquenzolo with editing by Kel. Bryce Durbin is our illustrator and we'd like to give a big thanks to our audience development team and Henry Pickavet, who manages TechCrunch Audio Products. Thanks so much for listening and we'll talk to you next time.
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