Robin Hood CEO Vlad Tenev was recently in Toronto, Canada. So, I had the opportunity to sit down with him for our fourth conversation. What I always appreciate about Vlad is his willingness to talk beyond just the next quarter and talk about where he believes the entire financial system is heading. We discuss Robin Hood's evolution from being a financial trading app to being a much broader holistic financial platform, the opportunities ahead in tokenization, prediction markets, and artificial intelligence, and what investors still might be underestimating whenever it comes to the future of this company. But without further ado, please enjoy this conversation with Robin Hood's co-founder and CEO, Vlad Tenev.
Vlad Tenev. Tanner Manson, welcome to Canada.
I'm happy to be here with you in the six.
Yeah. Okay. How was that?
Started off fun. Yeah. No, but I genuinely want to know why you're in Canada right now. Anything to announce?
I'm in Canada because we launched here. So Robin Hood is live in Canada with our crypto offerings. We now offer the lowest cost way to buy crypto in Canada. We have about 50 coins. Staking is coming soon. And yeah, we're excited to offer our Canadian customers low fees, tight spreads, and it's really just the beachhead for broader expansion of Robin Hood in this country. As you probably know, as a proud Canadian, you've been asking me when Canada for a while.
And I've had my eye on the market and on Canada. I've loved visiting here as a younger man. We've had an office here with about 200 engineers and it's been great because now they can finally use the product that they develop. So we are hard at work making it better and better and yeah, I'm excited to visit and start planting roots here. You know, my goal is, you told me, a single-digit percentage of your audience is in Canada, and my goal is twofold. To become one of Canada's largest employers and to, through our entry here, maybe turn your podcast into one of Canada's most popular podcasts.
Yeah. No, I would love that. Of course, you should have 50% of your audience should be Canadian.
But then I need to be using you as my full-time brokerage, crypto, the whole holistic plan. When do we start seeing potentially more entry?
Yeah, I mean it's just step one. So, you know, we'd obviously love to bring everything here. We have a lot of products and really Robin Hood is all about ownership. We want to make it as easy as possible for people to become owners of this great economy and that includes Canadian stocks as well. So, we'd love to bring that here.
And, you know, we recognize that we're brand new here, so we're going to have to prove ourselves like a small startup, but I think over time, you'll see us branching out, offering everything, bringing all of the stuff that we have in the US and some local products that are only for Canada as well. And, you know, it might take a few years, but I think we will become the market leader here as well.
Can you tell me a little bit about the demographics that you see here? Like is the amount of families that invest similar to what you see in the states? Can you see similar unit economics in Canada as you can in the states?
Yeah, I think it'll be pretty similar. You know, Canada has actually a relatively high participation rate in terms of household investing. It's in the 60s. Recently also self-directed investing has had a little bit of a moment. I think something like 40 or 45% of individuals have a self-directed account. So that's been growing quite a bit as well. You know, traditionally it's been more of a conservative market. People have been investing in funds. There's been a lot of activity in pensions. So, it's really about long-term wealth building and less active trading. But that's also an opportunity and a niche that we can fill.
You know, we can bring our trading products which have been very successful and offer both if people want to be more active. I think Robin Hood can differentiate on that front, but of course, we'll want to add local tax-advantaged wrappers and all of the more passive wealth-building tools as well.
I've been thinking about how you guys get to—I think you know during your Q2 announcement you announced 28.4 million funded customers. As we look ahead to where you get the next 10 million, 20 million. Do you think the majority of that new customer growth comes from the United States or it comes internationally from places like Canada and abroad?
Yeah, I think there is a path to get to—I call it—a hundred million in the United States and I think we're working on that. I mean, look, for example, at the Trump accounts initiative where we have 7 million children signed up and then 70 million overall under the age of 18 that are eligible and that could have accounts and, you know, not just Robin Hood, but our partners and stakeholders, US Treasury, all of the donors like Brad Gerstner and Michael and Susan Dell, BNY, everyone's kind of aligned to get the penetration rate into that 70 million as high as possible.
And, you know, we'll see those children's accounts compound. When they turn 18, they roll over into retirement accounts. I think if we serve them well, our retirement business is going to continue to grow potentially quite dramatically. So I think there is a path to a hundred million in the US but to get to multiple hundreds of millions of customers we would have to go quite deep internationally and we just announced we crossed one million customers outside of the US. So it's still nascent but I mean it's getting into real numbers and now we have our eyes on can we get to 10 million outside the US and then we can just look at every 10x scaling beyond that and we have multiple vectors.
You know, of course we want to go deep and offer regulated products where it makes sense but we also have the Robin Hood chain which is a foundation for DeFi products and now that we're putting real-world assets on chain with our stock tokens offering that expands the ability to have ownership to 120-plus countries. And so it looks a little bit different. It's, you know, DeFi wallets rather than individual net funded accounts or retirement accounts, but I think they'll increasingly merge over time. So yeah, I see multiple vectors where the company can grow 10x and we're pursuing them in parallel.
Now for the customers internationally, are you finding that you're able to market to them more efficiently than when you first started, let's say, in the UK? Like are you accelerating in your growth internationally?
Yeah, we're not really doing a ton of marketing internationally. What we've been focused on is getting the product to be really good, getting word-of-mouth growth. We have been growing in the UK where we're more mature. If you look at the percentage of the market where new downloads are coming in, Robin Hood has been increasing but we've yet to go big on the marketing. And I think part of the reason is we've kind of launched one product at a time. So we started with just stocks.
Then we added options. Then we added futures. Then we added multi-currency wallets which rolled out recently. Which is a lesson in Canada as well. Though you could say, you know, we're kind of doing the same thing here. But the aspiration is to with every market add more and more of the platform offering.
Because I think that's actually our biggest advantage. The fact that each of our products interoperate so well, you know, if you use the Robin Hood credit card, the cashback funnels into your brokerage account. Retirement is very nice next year self-directed and with simple money movement. Crypto and stocks side by side has been very powerful. So really the platform effects and the Gold product have been powering the flywheel in the US. So we'd like to—we're going to try to increasingly bring a larger portion of that to our overseas markets.
So, for me, as you expand internationally, I find that whenever it comes to like commission-free brokerages, you know, there are other companies that compete there. There are other companies that have credit cards. I think the thing that makes your company so special is that you have the best in breed across the entire spectrum. I was thinking about what would it take for me to switch as a customer over to Robin Hood and I'm really the type of person that is looking for multiple products. So, I love the fact that you guys have a wallet, but I would love the options and the stock trading and all of that all under one roof.
Have you tried our crypto product in Canada yet?
So, I downloaded and I saw it. I'm not really buying crypto right now. But yeah, I am technically a registered user.
Oh, great. Well, you can move your crypto from other platforms if you have it to us. But yeah, look, I mean we've got to start somewhere. We do have, you know, hundreds of thousands of customers in Canada through the Wonderfi acquisition. You know, they operated two regulated platforms, Bitbuy and CoinSquare, that were quite early to the market here. So, it gives us a good entry point.
But of course, Robin Hood isn't just about crypto. It's about can we get you to own great companies and of course equities are a big part of that. So, we'll be working with regulators and making sure that we have a good path to offer that here.
I also actually wanted to ask you about that. You guys have obviously made an amazing product, but through the acquisitions like Bitstamp and Wonderfi, at least for Bitstamp because we have a lot more information there. The acquisition has been very good and there's not really been, from my perspective, a hard transition. What are you doing right on your side that's creating this culture that whenever you go and acquire a new company that they feel that Robin Hood culture and immediately start to work towards your mission? More of an operator question, but I'm so curious.
I think that the important thing is to have great leadership and for leadership to be very, very clear, right? And I think that our crypto team, you know, Johan and Nicola who have been overseeing the Bitstamp acquisition are very strong. And in that particular case, the management team basically exited on day one of the acquisition. So each one is a little bit different, but I think sometimes, you know, the people have to be super in it, willing to commit for the long run. And we've had great examples where we've acquired companies and they've had great leadership that is committed, you know, TradePMR and X1 Card, which became the Robin Hood card being two examples there.
And in the Bitstamp case, we had to act decisively to make sure there was clear leadership that was aligned. And in that case, we kind of took the company over. And you know, Bitstamp also, if you look at their positioning in the crypto space, they were one of the original platforms. I mean, they're older than Robin Hood.
They're the longest continuously running crypto exchange out there. Of course, there were some before them, but they've all not survived for one reason or another.
So, and they were a Slovenian company and actually kind of one of the national prides of the Slovenian country. You know, we're one of the largest technology employers in the country now. And yeah, the company had kind of been sold multiple times. It was owned by private equity, family office. I think they were at a point where they were not really investing in the business. They were sort of dividend-ing out profits and things like that. So, when we first acquired the business, we saw a lot of low-hanging fruit for how to make the customers happier.
I had this lunch in the south of France because we closed the acquisition right around the time of our crypto event there last year. And you know, the customers of Bitstamp were mostly institutions, market makers. And so I had my notepad and I was like, 'Give me all the feedback. How can we make this better for you?' And, you know, I was expecting lots of new features. You know, I was expecting them to ask me about, you know, perp leverage and all this stuff, but it was just basic things.
It was like, 'Yeah, we want to send you more orders, but sometimes you'll just drop our orders silently.' So it's like basic technology issues and you know if we handled more than a hundred orders at a time things got slow. So the team's been hard at work with our engineering team just rebuilding everything. But you know, I've had a chance to spend a lot of time with the Slovenian team. They came to the Menlo Park office as well as us spending a lot of time over in Ljubljana. And they're great. I mean, hungry. They want to deliver. They want to ship fast. They want to use all the AI technologies and I think they just needed a little bit of freedom to just make the investments they needed and ship products.
And so yeah, in the past year, we've been doing well, launching, making that product better and better. Now there's even more DeFi and Bitstamp integration because if you want our stock token offerings, mint and burn goes through Bitstamp currently for institutions. So we'll see increasing integration over time.
Sticking on crypto really quickly, I really want to hear more about Robin Hood chain, what you guys are doing differently. Just tell me about this product a little bit more because this seems like a very big deal that from a crypto outsider, I don't know the nuance of what makes this so different.
Yeah. I mean the real differentiator is that Robin Hood chain is the first—it's the first chain purpose-built for real-world assets. And what that means is with the launch Robin Hood created stock tokens. So tokenized representations of US stocks that are fully DeFi-enabled. You can send and receive them on your DeFi wallet.
This is in applicable jurisdictions. So 120-plus countries all over the world. Typically countries that don't have robust capital markets, right. In Canada and in the US, in the UK you have robust markets, you have strong regulation but in a lot of places there is none which is a problem in the sense that traditional financial services haven't been able to really penetrate. You can't own stocks. It's hard to even in some of these places get access to dollars. For a while, people were just buying currency exchange, traveler's checks, things of that nature. And so crypto really made inroads in those countries because anyone with a smartphone could then on-ramp and send money through the standard money transmission and forex rails into the crypto platforms.
And that became a way to get US dollars ultimately via stablecoin and that's kind of why that's taken off. So this tokenization of equities takes it one step further. Now you can get access to SpaceX which we demonstrated in our event. We actually were able to send SpaceX to an African village which was kind of interesting. So kind of to some of the furthest reaches of the world now, as long as you have an internet connection you can get exposure and ownership and so you know we consider our stock tokens to be a core primitive of the ecosystem.
We're going to expand them over time. We are also going to add different real-world assets where we have a unique competitive advantage. We custody all these traditional things then we can through our tokenization engine start bringing them on chain onto Robin Hood chain.
Can you give some examples of that?
Well, of course, privates are the one I'm most excited about. And we demonstrated a year ago that we have the technology to do it with the—we became the first to tokenize OpenAI and SpaceX and we gave that as a gift to our customers and the next step would be obviously to fully productize it so you can buy and sell high-quality private companies as well. I've also got my eye on art and collectibles, real estate. So, anything that I would have in my portfolio, basically as a high-net-worth individual.
Can we just break it apart into lots of little chunks?
Yeah. Little chunks, offer it at very low cost to the global market, and Robin Hood chain's going to be a big part of that. I would say what surprised me is just how quickly it became a top chain.
Yeah. I mean, me too. That's why I was wondering what the real differentiation is because it exploded. The crypto fans picked up on it immediately.
I mean, it's the fastest growing chain of all time. Fastest to 100 million transactions. DEX volume has crossed 10 billion. I mean, I don't even know how long it took Robin Hood to cross 10 billion of volume. I think it was multiple years, right? And Robin Hood chain did it in weeks. So, that surprised us. And, you know, frankly, Robin Hood kind of gets accused of being a meme-based financial company. And of course, yeah, we have to convince people. We have to convince the market. Of course we like memes but we also like real-world assets.
And in the crypto community there's definitely a little bit of a tug-of-war but so a lot of the initial activity was people minting new meme coins. A lot of which have connections to Robin Hood lore and that's been fun to see. And a lot of people also look at that and say, well, maybe this isn't serious activity but I think they do have utility and for the ecosystem it's been really positive because you know to get as a new chain it's actually hard to get all the wallets and all the developers to come to you, right. Other chains have resorted to paying huge incentives to do that.
And so we've been fortunate because of the liquidity and volume brought in. That basically all of the major wallets have integrated rather quickly and the chain is not just doing incredibly well in transactions and DEX volume, but if you look at developer activity, it's one of the top chains as well, like right up there with the big ecosystems.
And you know, with all of this, you've seen developers bringing really interesting products to market that integrate the stock tokens and in some cases bring them together with memes and utility tokens and, you know, you see the real power of the composability of the chain and of DeFi. So, I think we'll see a lot more of that. You know, we understand it's a long game and what we're really looking for is can TVL continue to grow. How are we doing on stables? DEX volume I think has been good to see early on, but DEX volume typically follows the total value locked and how much people are bridging onto the chain and that stuff's looking really healthy as well.
So, how does a public company benefit from all of these transactions? Because—well, I think that's my question really.
Well, I mean, another thing that actually is public—
Sorry, if I could rephrase like you guys actually owning the chain rather than just utilizing.
Yeah. Sequencer revenues. Sequencer revenues is one of the—it's actually grown very, very quickly. Sequencer revenue and all of that information is actually public and on the internet. People have been tracking it relative to other chains. And you know it's now multiples of many chains that have been around for many, many years.
So sequencer revenue is probably the most direct method of monetization. But there's also other ecosystem-level monetization. So for example, if someone buys a stock token on Robin Hood and our brokerage business benefits because we process that transaction.
If someone uses Robin Hood Earn which is powered by Robin Hood chain and our USDG stablecoin, we benefit from that because we earn the economics on USDG and also on the Earn product. And that's gone from zero to north of 200 million in a relatively exploded very short amount of time.
Yeah. Because 7% APY is a very attractive value proposition.
So we benefit from all the things that we offer and from the sequencer and from distribution to our customers. Of course, now there hasn't been too many—I think we're being careful and deliberate with how we integrate the chain into the main app and the ecosystem, but you're starting to see some of the beginnings of that integration with the Earn product.
And you know, when you look at our wallet, our chain, and our main app, of course, we want the wallet to be the best experience for the chain. We want the chain to be the best DeFi experience for the main app. And our on-ramps from the wallet use a lot of the technology that our main app has used to do on-ramp and off-ramp. So, all of these things kind of integrate nicely to create one ecosystem of ownership.
Problems that you've solved before. You're using those solutions to help build out new products, I guess.
Yeah. And you know I think that our crypto team and Johan Song, you know, all the folks that you've seen in our events have just been doing tremendous work because I think it can be hard for us is we're traditionally considered like a tradfi company and you know in the crypto space tradfi is a little bit of like a dirty word, you know, it's like calling someone a boomer or something.
But yeah, I think that you know for a company with roots in tradfi, we've been able to innovate amazingly quickly and ship some really novel products that are at the frontier. And I think part of what surprised people was also that you guys just showed off that I think it's 13 products that are now above an annualized hundred million worth of revenue.
That's right. The newest ones, if I remember, is the event contracts and Robin Hood Legend.
