It took decades for Wall Street titans Jamie Dimon and Lloyd Blankfein to become billionaires. Baiju Bhatt and Vlad Tenev did it in a Silicon Valley minute.
The Robinhood Markets Inc. co-founders achieved that milestone after a recent funding round for the electronic stock brokerage pushed its valuation to about $6 billion, up from $1.3 billion last year. Bhatt, 33, and Tenev, 31, together own about a third of the company, or $1 billion each on paper, according to an analysis by EquityZen, a marketplace for shares in pre-IPO technology companies.
“Robinhood’s founders and their Merry Men of venture capitalists should be very pleased,” said EquityZen co-founder Phil Haslett. “Given the regulatory red tape involved, it typically takes fintech companies much longer to grow into $6 billion dollar businesses.”
Jack Randall, a spokesman for Robinhood, declined to comment.
Both are sons of immigrants, raised in rural parts of the U.S. before attending Stanford, where they met. Their first venture together was a hedge fund, but after observing the Occupy Wall Street movement up close and taking note of the populist outrage over income inequality, they decided to start a platform that lets users trade for free. The company said its users have saved more than $1 billion in commissions.
The online stock brokerage had a rough start, with more than 70 investors demurring before Robinhood got its first check, but things have taken off since. Just four years after the first trade was executed, more than 4 million consumers have opened accounts, surpassing E*Trade Financial Corp.’s 3.7 million.
The latest funding round brought in Sequoia Capital, Kleiner Perkins Caufield & Byers, Iconiq Capital and Alphabet Inc.’s growth fund CapitalG. Previous investors include DST Global, Index Ventures and New Enterprise Associates, along with celebrities like Ashton Kutcher and Snoop Dogg.
This article was provided by Bloomberg News.