Robinhood's Vlad Tenev: prediction markets heading to trillions, private markets access is the biggest inequity in finance

Cactus.

How you doing?

I like the Is the cactus symbolic of something.

Uh, well, I love succulents. And I think we're we live in a dangerous world, gentlemen. You know, you turn around, you just got to be careful. So, it's a constant reminder that you just have to watch your back

with a physical cactus behind you. Yes, you need to physically watch your back. Don't don't back up during this interview.

I have to really be careful here. Love cactuses, too. This is probably going to inspire us to get some cacti. Cacti, right?

Sorry to be pathetic.

No, no, you're you're right. We'll get some cacti around around this, too.

I'm more of a Christmas tree guy. I like big Christmas.

No, but I've been missing having some some plants in the

Yes. Anyway, sorry. We're not here to talk about

You know what's the thing about this cactuses? Yes.

You think that it's very dangerous, but you can train yourself to actually like

No way. Whoa.

Yeah. Yeah.

Alpha right here.

Yeah. It's all about the angle.

Amazing. All about the I had no idea that you could do that.

Bandaid on my hand last year. Let's see.

Fearless CEO touches cactus.

That's great. How's business? What's new in your world?

Well, we've got a lot of things going going down. You know, I know I know it's the day after earnings, but we're always looking forward to the future. And

what I did at earnings outlined our path for 2026. So, couple interesting things. uh number one in active traders. We're pushing hard on prediction markets. We think that we're in the midst of a prediction market super cycle and eventually this asset class is going to go from tens of billions to trillions in annual volume.

So, we're in the thicks of that.

We're also pushing on a bunch of initiatives that I care about super personally. Um private markets

and family finance. So through this year, if if you look at the end of the year, Robin Hood should be better for you. The more family members use it, we want to get your partners on Robin Hood, your children, your parents, grandparents, the whole family. And we're building tools accordingly with that. And then private markets. Um I think access to private markets is one of the biggest inequities in uh financial services today. So we're we're just working really hard to solve that for people. uh very very urgently.

Yeah. More specifically, you guys have a fund set up like I imagine there's more going on like where where where where's like private markets as a category going on the platform.

Mhm.

Yes. Cuz like fundamentally fundamentally the problem of like a lot of people have been excited about these billion dollar companies and watch them go from singledigit billion to you know hundreds of billions of dollars and having to just sit on the sidelines and hold SAS has been a rough rough for a lot of people over the last year

and I think it's really a continuation of a trend that's been going on for decades right it's it's gotten harder and harder to go public and at the same time more and more attractive and easier here to raise capital as a private company.

Yeah.

And uh yeah, our efforts in the US to stem the tide are Robin Hood Ventures,

which is currently on file uh with the SEC. We filed our N2, which you can think of as kind of a S1 for funds.

So, we're in the strict quiet period for that. Uh so I can't talk about about the fund specifically but in the US we're very focused on on solving this problem and we think we have a path.

Um and internationally we're going to push forward on tokenization. Last year we did our open AI and SpaceX stock token giveaways which showed us that there was just voracious demand for for access to these types of products. So this year it'll be about

hopefully getting from the giveaway stage to making that like a real uh making those products real and tradable uh for for customers and and also getting the companies to like uh engage in it willingly, right? I think I think we experimented a little bit, but uh we realized where we'd like to be is making it clear to companies that this is something they should want and benefit from just as much as as it is to the retail shareholder.

If you could rewind, how would you have uh have let retail traders invest in Robin Hood? Would you have done it at seed round if you could have series A, series B? Would that have been a headache? Would it have been worth it? walk me through if you could replay.

We we absolutely would have done it at seed. Um

not a lot of people know this about Robin Hood, but Robin Hood was actually we had kind of a hard time raising our seed round.

Wow.

And and so we talked to probably over a hundred investors. At one point, Robin Hood was live on Angel List, if you remember that platform,

and you could invest in Robin Hood at seed at a 10 million valuation cap. So, effectively, think of it as a

10 million valuation

and we would take all comers. I mean, we would pitch uh, you know, uh, middle-aged exret retirees from Nebraska the same way that we would pitch like Andrea and Horowits or a Sequoia. And, you know, they would ask us questions and if they wanted to invest, uh, we we typically would just let them invest. So, we have we have tons of shareholders that were just

Wow.

essentially retail. I mean, high net worth. Yeah. uh maybe uh but but they were just normal people and you know some of them even have messaged us they held through IPO and over the years and and have done quite well. So I absolutely

understatement.

Yeah I absolutely I want to I want to go back

yeah I want to go back to prediction markets uh uh prediction markets are bringing new people to the Robin Hood platform.

Uh that's exciting for the business. The push back and concern that people have is like people coming on maybe they want to trade the Super Bowl. Are those people going to make great financial decisions on the Robin Hood platform? Obviously you guys are an open platform. people can do whatever they want, but what are you going to be looking for to make sure that uh you know over time uh there's you know I think that the general concern is

you know I'm not going to use the G word but you know bringing like trading high-risisk trading to the platform um there's some very real kind of concerns around that so how are you making sure this kind of roll out as prediction markets as a category grow still serve you know the overall user Yeah, I think this is one of the things that we're actively working on. I think we you have some customers that really love prediction markets and for them they want it to be easier to get to and more intuitive and they don't like they they would probably say that our experience right now buries them too much and we make them too hard to get to. And then you have customers that, you know, don't want anything to do with it. They don't want to see it. And so we've been actively working on greater personalization so that we can let customers opt in or out if they'd like and and also we can detect automatically when someone wants to see that content in different places. So

this is just I mean prediction markets are kind of a test case. It's where it's most acute but we see it across the entire spectrum of products as we expand the breadth of our super app offering. For example, we have we have a credit card. We have banking. Now, banking is a separate app. And you have some customers saying, "Well, I'm kind of annoyed having to go through two different apps to get access to to banking. Can't we put it in the same one?" Others uh others want it to be separate and prefer it. And so we're we're continuing to experiment with this stuff, but but where it ends is just uh a really really tightly personalized experience depending on what each customer is looking for and and expecting. And I I don't think I think we're actually breaking new ground. I don't think financial services companies have done that. You see that a lot with with consumer products, but we're investing a lot on the machine learning infrastructure on the AI side into you know delivering that for for customers across our entire product suite. And I'd say more generally, you know, prediction markets um one of the unique things we we have is we're not a monoline prediction markets player. So we have the suite of products. We we can offer you a lot of things. And what we've been seeing increasingly is prediction markets have been great at attracting a new type of customer who previously may have not been as interested in Robin Hood. You know, they hear about us, they download the app, they onboard for prediction markets, and we're making that process easier and simpler and then we can onboard them to all sorts of other stuff. So, be it retirement accounts, our credit card, our banking product. And I think that's just uh something that's generally good for these customers. I see nothing wrong with someone coming in for prediction markets but then being, you know, discovering our retirement account with

I I certainly hope that people come in maybe they want to trade something that's happening in the news or or a game or something like that and they realize, hey, I actually just want to save good amount of my paycheck every month, invest in stable assets and, you know, invest in my retirement. I think that's actually true because

and I think I think everybody talks about these as two different types of people. You have your prediction markets users and your people that are interested in stable retirement. But what we increasingly see is that

actually it's the same people and you know I might be I'm obviously interested in a retirement account. I might have a small portfolio for my prediction markets or my options trading or my more speculative trades. But uh having both together in in one roof uh makes it a more valuable service for me.

How do you think about uh the news generation from prediction markets? It's always been an interesting way we we we pull up prediction markets all the time to understand um what what markets think about, you know, how many SpaceX launches there will be this year. Uh do you want to do more in content driven by prediction markets?

Yeah, and and we've been doing that uh quite a bit already. We have uh a whole slew of prediction markets that

are non-sports. And actually, one of the interesting things that we saw was the week after the NFL season ended, we had the government shutdown. and the the prediction market contract on the government shutdown actually drove a ton of volume because it was on everyone's mind and people wanted to see what the current status was, how likely it is and of course some portion of those customers uh traded. So we think that'll be a bigger and bigger thing and and again as we make it uh as we make it easier to surface things that are trending and things that we think you might be interested in. I think that'll strengthen the use case of looking at prediction markets as a source of news.

How do you think the wealth management industry broadly will adapt to AI? I think there's uh a lot of conversation recently around, hey, do I need to pay somebody 1% if I can ask an LLM, hey, what's a good strategy for somebody that makes X amount of money a year and wants to retire at this point and and uh wants to take a little risk but not too much and you can ask them questions about it. So, feels like that model uh could be threatened or at least uh margins could could compress. But how are you thinking about it both as an opportunity from from Robin Hood and then you know how the industry will have to evolve?

Yeah, I think I think the there's going to be a lot of disruption by AI. I mean we're starting to see it already. Um and we have Robin Hood Cortex which really has done well uh sort of like helping customers think through their their trading their sort of self-directed activity. But we've already begun conversations with regulators about how to bring Cortex to advice, making recommendations and and and doing ongoing portfolio management. So, uh obviously we'll want to roll that out safely and in a trustworthy way, but it's coming. And I actually think on the human advisor side, a lot of people prefer a human advisor. They prefer the relationship. they, you know, like to have someone that has the full picture and that they can talk to. So, I don't think that's going away. And in fact, AI is going to be a really integral part in streamlining the workflow of those people so that rather than serving, you know, 50 clients per advisor, you go to serving 500 or or possibly more. So I I think you're going to see both models continue but costs and efficiency and capabilities continue to grow for for each of them.

What's the status of uh copy trading? I there's a lot of people that are excited about situational awareness, what Leopold's doing over there. Uh how many clicks is it to to to copy his strategy and and how closely is it possible to copy these days the the big funds that have generated a lot of excitement?

Yeah. Well, we we have a product coming out, Robin Hood social, which should commence rolling out in in uh just like weeks to low singledigit months. So, we're kind of

putting the finishing touches on internal testing. We just integrated prediction markets, which actually makes the the feed much more dynamic.

Sure.

And when we announced it, one of the features that was like particularly popular was um whale tracking. So,

following Nancy Pelos's trades. this one,

you know, other things like that. So,

we're going to make it really what others are doing.

It is such a funny world we live in. It's the Nancy Pelosi stock ticker and yeah uh endlessly entertaining category. Always always new innovation, but congrats on the progress uh that uh Robin Hood social feature uh how much of his vibe coded? How much of a speed up are you getting internally? like what is the software engineering org look like these days in an era of coding agents?

Yeah, I mean we we've certainly been continuing to hire software engineers.

Okay. Perhaps not at the definitely not at the rate we were hiring in 2021, but

one of the reasons we've been able to deliver this high product velocity and keep costs relatively flat is because of the productivity improvements we've seen with AI.

Mhm.

And there's there's two things that we sort of like talked about at earnings. when we when we look at internal operations, the two areas that move the needle are software engineering and customer support

and I think we are at or at at the very least near best-in-class for both of those. So customer support side 75 plus% of all tickets are handled by AI including licensed cases that would have previously required a licensed brokerage professional.

And and we thought I mean frankly we thought that would be further away. we were able to to get there and deliver a great experience relatively quickly. And on the software engineering side, it it's been tremendous. I mean, with every new generation of models, you look at, you know, Opus 4.6, now you've got codeex. Uh you can essentially have it running autonomously overnight, checking its own output, debugging itself, and have it do the work that probably would have taken an individual software engineer weeks to do uh while you sleep. And one year ago, that wasn't possible. So the acceleration from each new generation of models is uh is tremendous. And I I think there's going to be lots and lots of disruption. You can kind of see the market starting to digest that. But

I think the firms that adopt AI and are actual technology companies,

this is the opportunity to dramatically accelerate relative to incumbents and financial services. You know,

a lot of our competitors aren't really even on cloud infrastructure anymore. They're still on mainframes. So, I think uh I think I think it's going to become it's going to become increasingly tough.

Yeah. Uh last last question then then we'll let you go if if you have another second. Uh how are you thinking about M&A? You guys clearly have built the muscle to take new products from zero to one. I'm sure you have a lot of confidence around that. But what what's interesting from an acquisition standpoint? What's your M&A team, you know, spending time on generally?

I mean we're certainly uh always always looking. Last year we were quite active with a number of acquisitions and I think we've really built the muscle to integrate them well. uh in particular you have Bitstamp which since we closed that acquisition has basically doubled in in revenue and typically when you go through an integration like this it's tougher right because things tend to slow down but we've been able to actually accelerate as we've integrated

so that's good to see um and and we're on the lookout you know a lot of people are bearish on the crypto industry right now we remain bullish on on crypto and we think that you know now is the time for builders to build and uh just just like in the past the cycle goes up and down but long run we think crypto is going to become the financial system and they're going to converge and so um you know I think we're we're still investing heavily there.

That's awesome.

Very cool.

Yeah. Yeah. Thank you so much for taking the time to come chat with us. Very very interesting. Uh

thanks Sean. Thanks.

Yeah. Hope you have a good rest of your day. It's funny. So, so many other other CEOs come on and they're dealing, you know, with the crazy volatility in the market and you're just like you're like first time.

Yeah.

Uh it's great. So, good good to see you.

Grizzled.

Congrats.

We'll talk to you later. Have a good one.

Cheers.

Goodbye. Let me tell you about Cisco. Unlock infrastructure for the AI era. Unlock seamless realtime experiences and new value with Cisco. And without further ado, we have Jeff Lawson.

And we are starting the lightning round. We are starting the the lambda lightning round.

Let's let's activate the gong. Thank you, Ben.

We have Jeff Lawson in the reream waiting room. Or actually, are we delayed here? Let's uh let's figure it out.

I will tell you about Lambda because it's actually the next uh one in the stack. Lambda is the super intelligence cloud building building AI supercomputers for training and inference that scale from one GPU to hundreds of thousands. Uh we have Sam Blonde coming on the show in just a few minutes and

uh this kind of gets at what I was asking Vlad about. Buco says unless you have 5 million AI is already good enough to be your financial adviser. Even then it's probably good enough. Try it. Share net worth where how you've allocated assets what your goals are. Ask it to analyze and identify opportunities for improvement.

Stress test different scenarios.

It gets basically everything right. So, uh, bullish on just out of the box LLMs