Robinhood Clearing and Custodial

Author

Howard Lindzon
October 13, 2018

Our portfolio company Robinhood continues to take risk, delight and amaze. It’s not just software and design that makes Robinhood special.

Robinhood now has the only clearing system built from scratch on modern technology in at least the last decade.

Robinhood co-founder and co-CEO Vlad Tenev tells me. Most clearing services ran mainframes and terminal-based UIs that aren’t built for the pace of startup innovation. Going in-house “allows us to vertically integrate our business so we won’t have to depend on third-parties for foundational aspects. It’s a huge investment in the future of Robinhood that will massively impact our customers and their experience, but also help us out on building the kind of business we want to build.”

Vlad Tenevev, one of the founders, also wrote this open letter to the public and of course their users explaining the execution system and exchanges and how rebates work in the markets.

This latest and great Robinhood attack on improving the industry is why I am super bullish on not just our investment in Robinhood, but also our fund’s (Social Leverage) ability to continue to find and fund great teams and products using software, design and hard work to change the landscape of financial services.

PS – Rally Road, another portfolio company of Social Leverage, is getting rave reviews from leaders in the technology industry for their use of software, design, creativity and hard work to disrupt the financial services industry.

I love this line about Rally Road from Alexis Ohanian Sr. (Reddit Founder):

In a world with lots of capital seeking yield, software is creating more financial opportunities in new & creative ways.

Have a great weekend.

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