"\\r\\n<br><div id=\\"RegularArticle-ArticleBody-5\\" data-module=\\"ArticleBody\\" data-test=\\"articleBody-2\\" data-analytics=\\"RegularArticle-articleBody-5-2\\"><span class=\\"HighlightShare-hidden\\" style=\\"top:0;left:0\\"\\\/><div class=\\"InlineImage-imageEmbed\\" id=\\"ArticleBody-InlineImage-103747621\\" data-test=\\"InlineImage\\"><div class=\\"InlineImage-wrapper\\"><div><p>Vlad Tenev and Baiju Bhatt, who co-founded Robinhood.<\\\/p><p>Mark Neuling | CNBC<\\\/p><\\\/div><\\\/div><\\\/div><div class=\\"group\\"><p>Fintech is minting billionaires by the month.<\\\/p><p>Already this year, <a href=\\"https:\\\/\\\/www.cnbc.com\\\/quotes\\\/COIN\\" target=\\"_blank\\" rel=\\"noopener\\">Coinbase's<\\\/a> co-founders have joined the billionaire ranks, along with the founders of <a href=\\"https:\\\/\\\/www.cnbc.com\\\/quotes\\\/AFRM\\" target=\\"_blank\\" rel=\\"noopener\\">Affirm<\\\/a> and <a href=\\"https:\\\/\\\/www.cnbc.com\\\/quotes\\\/MQ\\" target=\\"_blank\\" rel=\\"noopener\\">Marqeta<\\\/a>. 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.<\\\/p><p>Now, it's Robinhood's turn.<\\\/p><p>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 mid-point of the company's price range given in its updated <a href=\\"https:\\\/\\\/www.sec.gov\\\/Archives\\\/edgar\\\/data\\\/0001783879\\\/000162828021013986\\\/robinhoods-1a1.htm#ib5a32e8afc3b422193a2f2891a49e0c9_910\\" target=\\"_blank\\" rel=\\"noopener\\">IPO prospectus<\\\/a> on Monday.<\\\/p><p>Tenev, Robinhood's CEO, and Bhatt, the chief creative officer, 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.<\\\/p><p>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.<\\\/p><p>Fintech is capturing an outsized share of the gains.<\\\/p><p>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 <a href=\\"https:\\\/\\\/www.cnbc.com\\\/2021\\\/06\\\/09\\\/marqeta-ipo-mq-begins-trading-on-the-nasdaq.html\\">public<\\\/a> last month, while Affirm's Max Levchin <a href=\\"https:\\\/\\\/www.cnbc.com\\\/2021\\\/01\\\/05\\\/affirm-ceo-max-levchin-to-become-next-billionaire-from-paypal-mafia.html\\">owns shares<\\\/a> valued at over $1.5 billion in his online lender, which held its IPO in January.<\\\/p><\\\/div><div class=\\"InlineImage-imageEmbed\\" id=\\"ArticleBody-InlineImage-106868260\\" data-test=\\"InlineImage\\"><div class=\\"InlineImage-wrapper\\"><div><p>Coinbase Founder and CEO Brian Armstrong attends Consensus 2019 at the Hilton Midtown on May 15, 2019 in New York City.<\\\/p><p>Steven Ferdman | Getty Images<\\\/p><\\\/div><\\\/div><\\\/div><div class=\\"group\\"><p><a href=\\"https:\\\/\\\/www.cnbc.com\\\/quotes\\\/SOFI\\" target=\\"_blank\\" rel=\\"noopener\\">SoFi<\\\/a>, 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, though no individual holder owns a billion-dollar stake.<\\\/p><p>That's before dipping into the companies that are still private. Payments company <a href=\\"https:\\\/\\\/www.cnbc.com\\\/2021\\\/03\\\/14\\\/stripe-valued-at-95-billion-in-600-million-funding-round.html\\">Stripe<\\\/a> 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, <a href=\\"https:\\\/\\\/www.cnbc.com\\\/2021\\\/06\\\/10\\\/klarna-softbank-funding-round.html\\">is now worth $46 billion<\\\/a> on the private market. Klarna CEO Sebastian Siemiatkowski has a net worth of $2.2 billion, according to Forbes.<\\\/p><p>The list goes on. Chime, which delivers banking services through mobile phones, is <a href=\\"https:\\\/\\\/www.cnbc.com\\\/2020\\\/09\\\/18\\\/chime-is-now-worth-14point5-billion-surging-past-robinhood-as-the-most-valuable-us-consumer-fintech-.html\\">worth $14.5 billion<\\\/a>, while Plaid, which provides back-end technology that connects apps with bank accounts, is valued at <a href=\\"https:\\\/\\\/www.cnbc.com\\\/2021\\\/04\\\/07\\\/plaid-hits-13point4-billion-valuation-in-the-wake-of-scrapped-visa-deal.html\\">$13 billion<\\\/a> after <a href=\\"https:\\\/\\\/www.cnbc.com\\\/quotes\\\/V\\" target=\\"_blank\\" rel=\\"noopener\\">Visa<\\\/a> was forced to scrap its planned acquisition of the company.<\\\/p><p>\\"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,\\" Zach Perret, Plaid's CEO and co-founder, told CNBC, when the latest financing round was announced in April.<\\\/p><p>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.<\\\/p><p>Users flocked to Robinhood in the first quarter as crypto trading volumes soared and the popularity of meme stocks like <a href=\\"https:\\\/\\\/www.cnbc.com\\\/quotes\\\/GME\\" target=\\"_blank\\" rel=\\"noopener\\">GameStop<\\\/a> and <a href=\\"https:\\\/\\\/www.cnbc.com\\\/quotes\\\/AMC\\" target=\\"_blank\\" rel=\\"noopener\\">AMC Entertainment<\\\/a> 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.<\\\/p><\\\/div><h2 class=\\"ArticleBody-subtitle\\"><a id=\\"headline0\\"\\\/>Robinhood co-founders will retain voting control<\\\/h2><div class=\\"group\\"><p>Tenev, 34, and Bhatt, 36, have dealt with their share of troubled headlines this year on the path to what will likely be one of the biggest IPOs of 2021.<\\\/p><p>While the increased activity was a major boon to Robinhood's revenue, the company had to halt trading of GameStop and other stocks in January because the unexpected surge in volume created a liquidity crunch.<\\\/p><p>\\"In order to protect the firm and protect our customers we had to limit buying in these stocks,\\" Tenev told CNBC's\\u00a0<a href=\\"https:\\\/\\\/www.cnbc.com\\\/andrew-ross-sorkin\\\/\\">Andrew Ross Sorkin<\\\/a>\\u00a0after the restrictions were put in place.<\\\/p><\\\/div><div class=\\"group\\"><p>Robinhood ultimately <a href=\\"https:\\\/\\\/www.cnbc.com\\\/2021\\\/01\\\/29\\\/robinhood-raises-1-billion-and-taps-credit-lines-to-make-trading-of-gamestop-available-to-customers.html\\">raised $1 billion<\\\/a> from investors to shore up its balance sheet, but the incident raised questions about the company's business model, known as <a href=\\"https:\\\/\\\/www.cnbc.com\\\/2020\\\/08\\\/13\\\/how-robinhood-makes-money-on-customer-trades-despite-making-it-free.html\\">payment for order flow<\\\/a>. Robinhood lets users buy and sell for free, and charges market makers such as Citadel Securities or Virtu for the right to execute customer trades.<\\\/p><p>The Financial Industry Regulatory Authority said in June that Robinhood <a href=\\"https:\\\/\\\/www.cnbc.com\\\/2021\\\/06\\\/30\\\/robinhood-to-pay-70-million-for-misleading-customers-and-outages-the-largest-finra-penalty-ever.html\\">will pay roughly $70 million<\\\/a> in penalties for its systemwide outages and misleading communication and trading practices. The company faces dozens of proposed class-action lawsuits, as well as examinations or investigations by regulators, state attorneys general, the SEC, FINRA, and the U.S. Department of Justice.<\\\/p><p>In its initial prospectus earlier this month, Robinhood disclosed that <a href=\\"https:\\\/\\\/www.cnbc.com\\\/2021\\\/07\\\/01\\\/feds-seized-robinhood-ceos-phone-as-part-of-gamestop-trading-probe.html\\">Tenev's phone was seized<\\\/a> by federal attorneys as part of the GameStop probe.<\\\/p><p>Still, Robinhood's co-founders, who are both board members, are positioned to profit handsomely when the company goes public and will control the vast majority of decisions from here.<\\\/p><p>Tenev and Bhatt will own all of Robinhood's Class B shares after the offering. Those shares have 10 times as much voting power as Class A shares, according to the prospectus, giving Tenev will control of 26% of voting power, and Bhatt control of 39%.<\\\/p><p>They've already cashed out tens of millions of dollars worth of shares.<\\\/p><p>In 2018, they each sold $55 million of stock to investment firm DST Global in a secondary transaction, and the following year the co-founders participated in a $67.6 million tender offer available to \\"certain of our employee stockholders,\\" the filing said.<\\\/p><p>Robinhood\\u00a0is a five-time\\u00a0<a href=\\"http:\\\/\\\/cnbc.com\\\/disruptors\\">CNBC Disruptor 50<\\\/a>\\u00a0company that topped this year's list.<\\\/p><p><strong>WATCH:<\\\/strong> CNBC's full interview with Plaid CEO Zach Perret<\\\/p><\\\/div><\\\/div>\\r\\n\\r\\n<br><a href=\\"https:\\\/\\\/www.cnbc.com\\\/2021\\\/07\\\/19\\\/robinhood-founders-to-be-worth-over-5-billion-as-fintech-ipos-pile-up.html\\">Source link <\\\/a>"