NEW YORK (TIP): Baiju Bhatt, the Indian American cofounder of the trading unicorn Robinhood, has become the latest Indian American billionaire thanks to the stunning growth of the financial services company in the past year.
Robinhood, a no-fee stock trading app, has upended Wall Street by allowing “little guys” with limited resources to invest in stocks. Last week, the company was in the news after it restricted the trading of certain stocks, most notably GameStop, AMC, and Blackberry, following the efforts of many Reddit users to drive up the stock’s price.
The move was met by severe backlash on social media, as internet users, celebrities and politicians alike came together to criticize Robinhood, which was founded by Bhatt and fellow Stanford alum Vladimir Tenev in 2013, for seemingly trying to protect hedge funds.
However, the controversy caused windfall for Robinhood. The company infused $3.4 billion in the last week of January alone. And on January 29, the app was downloaded a record one million times.
Bhatt and Tenev had become billionaires even before the latest round of fundraising. According to Forbes, their net worth exceeded that magic 10-digit figure when Robinhood raised $800 million at a valuation of more than $11 billion last August.
According to Forbes, Bhatt owns approximately 10.5 percent stake in Robinhood.
Born to Indian immigrant parents from Gujarat, India, Baiju Prafulkumar Bhatt grew up in eastern Virginia on the Atlantic coast. His parents moved to the United States in 1984, when his father Praful Pranlal Bhatt enrolled for a PhD program in theoretical physics at University of Huntsville, Alabama.
Later the family moved to Poquoson, 75 miles to the southeast of Richmond, on the Chesapeake Bay. After completing his high school, Bhatt moved to the West Coast to do under-graduation at Stanford University in physics, following in his father’s footsteps.
After earning his B.A. in physics, Bhatt stayed at Stanford to earn his master’s in mathematics as well. It was then he and Tenev became classmates and roommates.
Bhatt and Tenev started two companies in New York together before they launched Robinhood, an idea that was inspired by the “Occupy Wall Street” movement in New York. They came to the realization that there was an entire untapped market of potential small investors that were deterred to trade because of fees or minimum account balances.
Thus, the two friends decided to make their app free, letting people trade stocks without any fees.
“We are not setting any account minimums, which we think unlocks a market of investors who couldn’t do this before. We see Robinhood as unlocking the microinvestor market,” Bhatt said in an interview with CNBC during launch.
Bhatt stepped down from his position as the company’s CEO in November 2020, leaving Tenev as the single CEO of the company. The change in leadership was a move made so that Bhatt could direct his attention more to product development, according to Forbes.
The Indian American billionaires’ club includes Romesh Wadhwani, the founder and CEO of Symphony Technology Group; venture capitalist Vinod Khosla; investors Kavitark Ram Shriram and Brian Niranjan Sheth; Bharat Desai and Neerja Sethi, co-founders of Syntel.