Is Robinhood About to Become the World's Financial Super App? with Johann Kerbart

**Robbie Klages** (0:00)
Johann, welcome to the show.

**Johann Kerbart** (0:01)
Thank you for being here, man.

**Andy** (0:02)
Thanks for calling. Pleasure.

**Robbie Klages** (0:04)
Yeah, man. Robinhood Crypto has gone from an experiment a couple of years ago to a fully fledged market. Johann, what has it been like the last couple of years working at Robinhood and building out this entire arm of the business?
It's absolutely blowing up.

**Johann Kerbart** (0:21)
Yeah, it's been very cool. We started in 2018, actually during the winter of Crypto. And so back in the days, a lot of people were saying, what do you even care about listing Bitcoin and Ethereum? And so at the time, our thinking was really like, we want people to have access to all types of financial instruments that they care about. And Crypto was one of them.
But since then, we listed more assets. We started to offer staking in most of the states, transfer, we have our own self-custodial wallets, and we also launched in Europe. So last year, we did north of a billion dollar in revenue just for the Crypto part. And so we are really excited to keep building on it. And now the market is a bit calmer, but we are focusing on building a new feature that people will use the next time the market comes back.

**Andy** (1:02)
Yeah, like you said, market is a bit calmer, but prediction markets have been absolutely insane. You guys have a stat here, prediction markets surged 320% on Robinhood. Why do you think the market is so crazy about prediction markets?

**Johann Kerbart** (1:18)
Well, I think it's a new way for people to invest. So for a lot of people before, they could not hedge against what else the feds are going to do about the rates, or what is the future of AI, or what is the best company to build a model. But with prediction market and even contracts, you really have different ways to actually hedge your portfolio. And I think that's something that is very new. So now, if I want to invest compared to AI, instead of trying to pick one specific stock like NVIDIA, AMD or Microsoft or whatever, I can actually pick one of the event contracts that is about AI and actually have a lot more ways to invest in the market. So we think it's a very different way that people didn't have access before and it was more reserved to very specific institution.
And so we are really excited. It's one of the fastest growing business at Robinhood. And so it shows also the power of our super app where you have everything within one app. You don't have to transfer money between the different platform.
And you can go from buying stocks to buying Crypto, to buying even contracts. Yeah.

**Andy** (2:27)
One follow up question on prediction markets. Given the success of the prediction market product, and like you said, the super app concept of Robinhood, do you intend on verticalizing more of the prediction market stack? Right now, there's so much order flow going to Robinhood. I think maybe there's other exchanges that are settling some of these contracts. Do you think Robinhood might internalize any of that market execution?

**Johann Kerbart** (2:51)
Yeah, so we think that the exchanges are almost a commodity at this point. And for any product that we launch, we usually route to multiple exchanges. So it's the same for Crypto, it's the same for equities, where we route to multiple market makers.
And so for prediction market, we already route to multiple exchanges. We have Cal-Shee obviously, but we also have ForecastX. And we announce a joint venture with Sessequoia, Rosera, which is going to be an exchange that is going to support the type of event contract that we care about. And for us, it's important because it will allow us to really support everything that we want to offer to our customers.

**Robbie Klages** (3:28)
Yeah. When it comes to kind of integrating a lot of these under-the-hood products, right? Like as you said, kind of thinking about Robinhood as an aggregator of Crypto protocols and products, one that comes to mind, obviously from a competitor, is the way that Coinbase has done Bitcoin-backed loans with Morpho, I believe. They've done this kind of set up where you can deposit your Bitcoin, borrow against it with Stables. I believe you guys have also integrated or integrating lighter for Perps in the future and kind of thinking about how that works. How do you think about building a Crypto business with different product lines and utilizing the underlying tech, whether it be these on-chain markets for lending, prediction markets, Perps?