Vlad Tenev and Baiju Bhatt, who co-founded Robinhood.
Mark Neuling | CNBC
Fintech is minting billionaires by the month.
Already this year, Coinbase’s co-founders have joined the billionaire ranks, along with the founders of Affirm and Marqeta. For years, Silicon Valley has been taking on the banking incumbents with promises of a better customer experience, but it’s only now that emerging trading apps, payment upstarts and online lenders are achieving big public market valuations.
Now, it’s Robinhood’s turn.
Vlad Tenev and Baiju Bhatt, who were roommates at Stanford almost a decade ago, are each poised to be worth about $2.6 billion on paper when their trading app debuts on the Nasdaq later this month. That’s based on the $40-pershare midpoint of the company’s price range given in its updated IPO prospectus on Monday.
CEO Tenev and chief creative officer Bhatt will each own 7.9% of the company’s outstanding shares, according to the filing. They’re also each selling about $50 million worth of shares in the offering.
It’s been a banner year for tech listings, with at least 12 companies that went public through an IPO, direct listing or special purpose acquisition company (SPAC) attaining a market capitalization of $10 billion or more. Between those companies and a few others with lower valuations, the tech industry has minted 16 billionaires in 2021.
Fintech is capturing an outsized share of the gains.
Coinbase CEO Brian Armstrong owns stock in his cryptocurrency app worth about $8.7 billion after the company’s direct listing in April. Fred Ehrsam, who co-founded the company with Armstrong in 2012, owns a $2.7 billion stake. Marqeta CEO Jason Gardner is worth close to $2 billion after taking his payment technology company public last month, while Affirm’s Max Levchin owns shares valued at over $1.5 billion in his online lender, which held its IPO in January.
Coinbase Founder and CEO Brian Armstrong attends Consensus 2019 at the Hilton Midtown on May 15, 2019 in New York City.
Steven Ferdman | Getty Images
SoFi, a provider of college loans, home loans and a variety of investment and insurance products, went public through a SPAC in June and is now valued at $12 billion. To be sure, no individual holder owns a billion-dollar stake.
That’s before dipping into the companies that are still private. Payments company Stripe was valued at $95 billion in a financing round in March, giving sibling co-founders Patrick and John Collison a combined stake of $23 billion, according to the Bloomberg Billionaires Index. Klarna, a Swedish payments company, is now worth $46 billion on the private market. Klarna CEO Sebastian Siemiatkowski has a net worth of $2.2 billion, according to Forbes.
The list goes on. Chime, which delivers banking services through mobile phones, is worth $14.5 billion, while Plaid, which provides back-end technology that connects apps with bank accounts, is valued at $13 billion after Visa was forced to scrap its planned acquisition of the company.
“Our market is seeing a sea change, with consumers that we never thought would be embracing digital finance engaging with it in a big way,” Plaid CEO and co-founder Zach Perret told CNBC when the latest financing round was announced in April.
Robinhood said it plans to sell shares at $38 to $42 each prior to its expected Nasdaq debut next week. That could value Robinhood at up to $35 billion, up from a private market valuation of $11.7 billion in September.
Users flocked to Robinhood in the first quarter as crypto trading volumes soared and the popularity of meme stocks like GameStop and AMC Entertainment led millions of new traders to the app. At the end of March, Robinhood had 17.7 million monthly active users, up from 11.7 million at the close of 2020.