- The 35-year-old met co-founder and current CEO Vladimir Tenev at Stanford and founded the financial services company in 2013.
Robinhood, a financial services company and creator of the popular stock-trading app of the same name, is making headlines after it restricted the trading of a couple of stocks following an effort by users of a chat group to drive up their price. The most visible face since the story broke is co-founder and CEO Vladimir Tenev, who has been appearing on several news channels defending the company and its policies.
But away from the media attention is the Indian American entrepreneur behind the trading company and app. Meet Baiju Bhatt, the cofounder of Robinhood. Bhatt and Vladimir Tenev cofounded Robinhood in 2013. The two met in Stanford as classmates and roommates.
Until late last year, both Bhatt and Tenev shared the role as the company’s CEO. However, last November, the company announced that Tenev will be the company’s sole chief executive, ending an arrangement the two shared since the company’s launch. “The move comes amid ongoing speculation that Robinhood plans to go public in the coming months, and after the company raised $660 million in a recent Series G funding round,” Fortune reported at the time.
Robinhood is currently in news for reportedly barring GameStop trading from its portal as stock prices skyrocketed. In an interview with CNBC, Tenet said the company had to limit buying in the stocks “in order to protect the firm and protect our customer.” Adding that “Robinhood is a brokerage firm,” he said, “we have lots of financial requirements. We have SEC net capital requirements and clearinghouse deposits. So that’s money that we have to deposit at various clearinghouses.”
After Robinhood restricted GameStop, it suffered a massive negative backlash on app portals. A lawsuit was also filed against the company that alleges that its mobile app “purposefully, willfully and knowingly removed the stock ‘GME’ from its trading platform amid an unprecedented stock rise,” MEAWW reported. The restriction on GameStop trading was lifted 24 hours following an outcry, from even Democrat and Republican lawmakers.
Although Bhatt is not actively involved in the company anymore, the 35-year-old son of Indian immigrants, Pragna and Praful Bhatt, has played an important role in the inception and rise of the company.
On its website, the two talk about the genesis of Robinhood, which began in New York, where Tenev and Bhatt moved after graduating from Stanford. Bhatt has a bachelor’s degree in physics from Stanford University, where he also got his master’s degree in mathematics.“In New York, the two built two finance companies, selling trading software to hedge funds,” the website says. After following the 2011 protests of Occupy Wall Street, they witnessed issues that were taking place in the financial industry at that time.
“We were in the center of a lot of the frustration around the financial system,” Bhatt told the Wall Street Journal in a Feb, 21, 2020 interview. “A lot of people were feeling like it was fundamentally broken.”
This is where the idea for the formation of Robinhood came from. “With their newfound experience in the world of finance, they realized that big Wall Street firms pay effectively nothing to trade stocks, while most Americans were charged commission for every trade,” the website says. “They soon decided it was more important to build products that would provide everyone with access to the financial markets, not just the wealthy.” They then moved back to California and built Robinhood.
MEAWW reported that during pre-registration for the app, Bhatt and Tenev “told the users to refer the app to their friends if they wished to move up the list, resulting in over 1 million waiting users when the app was launched on Apple’s App Store.”
Bhatt told the Journal that throughout his career, “he has learned the importance of reinventing one’s job as companies grow and evolve.” He noted that the “kind of problems that we were solving when we were building our first app are very different from the problems that we’re solving today,” and added, “In order for us to be successful…we have to be able to and be open-minded enough to reinvent ourselves every six months.” Bhatt is married to Adrienne Sussman and the couple have a year old son.
The New York Times says the Silicon Valley-based company “has been key to empowering the online investors. Adoption of the app has soared in the pandemic as the stock market surged and people took up day trading in the void of other pastimes. The company has drawn in millions of young investors who had never traded before by offering no-fee trading and an app that critics have said makes buying stocks feel like an online game.” While the company had 13 million users, the Times says that this week, “it became the most-downloaded free app in Apple’s App Store, according to Apptopia, a data provider.”
Bhargavi Kulkarni has been a journalist for nearly two decades. She has a degree in English literature and French. She is also an adventure sport enthusiast, and in her free time, she likes to cook, bake, bike and hike.