Robinhood

Revolut

Robinhood

Robinhood makes money in ways that don't involve charging users directly. The biggest revenue source is payment for order flow (PFOF) — when users place a trade, Robinhood routes it to market makers like Citadel Securities, who pay Robinhood for the right to execute the trade.

This generates hundreds of millions annually. Robinhood also earns interest on uninvested cash sitting in user accounts, margin lending (charging interest when users borrow money to trade), and Robinhood Gold — a $5/month subscription for larger instant deposits, professional research, and higher interest on cash.

Revolut

Revolut uses a freemium model with subscription tiers. The free Standard account covers basic spending, transfers, and currency exchange up to $1,000/month at interbank rates.

Plus is $3.99/month, Premium is $9.99/month, Metal is $16.99/month, and Ultra is $45/month — each tier adds perks like higher exchange limits, travel insurance, airport lounge access, cashback, and crypto trading. Revolut also earns revenue from interchange fees on card transactions, crypto trading spreads, and premium business accounts.

Robinhood

Vlad Tenev and Baiju Bhatt met as physics and math students at Stanford. After graduating, they moved to New York and started two fintech companies that sold trading software to hedge funds.

While building tools for Wall Street, they noticed something absurd: it cost brokerages essentially nothing to execute a trade electronically, but they were charging retail investors $7-10 per trade.

The math was simple. Electronic trading had driven costs to near zero, but brokerages kept the old pricing because customers didn't know better.

Tenev and Bhatt thought: what if we just charged zero? In 2013, they founded Robinhood with the explicit mission of democratizing finance — giving everyone access to the stock market with no commissions, no minimums, and a beautiful mobile app.

The app launched in 2014 with a waitlist that hit 1 million people before the product was even available. The pink-and-green design, the confetti animation when you made a trade, and the simplicity of the interface made investing feel approachable.

For millions of young Americans who had never bought a stock, Robinhood was the entry point.

Revolut

Nikolay Storonsky was a trader at Credit Suisse and Deutsche Bank in London. Every time he traveled for work, he noticed the same rip-off: banks were charging 3-5% hidden fees on foreign exchange transactions.

You'd pay in euros and your bank would convert at a terrible rate and pocket the difference. Storonsky calculated he was losing hundreds of pounds a year on currency conversion alone.

In 2015, he teamed up with Vlad Yatsenko, a developer, and built Revolut. The first version was simple — a prepaid card linked to an app that offered interbank exchange rates with no markup.

You could hold multiple currencies, switch between them instantly, and spend abroad without getting robbed by your bank. The product launched through a crowdfunding campaign on Crowdcube that raised over $1 million.

The early adopters were frequent travelers, expats, and digital nomads — people who felt the foreign exchange pain most acutely. Word spread fast through London's tech and finance circles.

Within a year, Revolut had 100,000 users.

Robinhood

Robinhood grew by making investing feel like a game. The app was designed to be addictive — swipe to trade, confetti for your first purchase, notifications about stock movements.

It was investing designed for the smartphone generation. Critics called it "gamification of finance." Users called it the first trading app that didn't feel like it was designed in 1997.

The referral program was massive. Both the referer and the new user got a free stock when someone signed up.

People were getting free shares of Apple or Ford just for downloading the app. It spread through college campuses like wildfire.

By 2020, the average Robinhood user was 31 years old — decades younger than the average brokerage customer.

Zero commissions forced the entire industry to follow. In October 2019, Charles Schwab, TD Ameritrade, E-Trade, and Fidelity all dropped their trading commissions to zero within days of each other.

Robinhood had single-handedly destroyed the commission-based brokerage model that had existed for decades.

Revolut

Revolut grew through aggressive multi-market expansion and viral product features. The fee-free foreign spending was the initial hook — travelers told other travelers.

The app added features at a relentless pace: crypto trading, stock investing, budgeting tools, salary advance, and insurance. Every feature gave users another reason to move more of their financial life into Revolut.

The referral program was engineered for virality. Users got cash bonuses for inviting friends.

Temporary metal cards, limited-time perks, and gamified challenges kept users engaged and sharing. Revolut also offered higher savings rates than traditional banks, pulling in deposits from customers who had only used it for travel spending.

Geographic expansion was systematic. Starting in the UK, Revolut rolled out across Europe country by country, then into the US, Australia, Japan, and Singapore.

Each market launch followed the same playbook — launch with the multi-currency card, build the user base, then layer on banking features once they had a critical mass.

Robinhood

GameStop was the worst week in Robinhood's history. In January 2021, Reddit's r/WallStreetBets community drove GameStop stock from $20 to $483.

Millions of Robinhood users were buying. Then on January 28, Robinhood restricted buying of GameStop and several other meme stocks.

Users could only sell, not buy. The stock crashed.

The backlash was nuclear. Users accused Robinhood of siding with hedge funds against retail investors.

Vlad Tenev was dragged before Congress. The real reason was less sinister but equally damaging — Robinhood's clearinghouse (DTCC) demanded $3 billion in additional collateral due to the extreme volatility, and Robinhood didn't have it.

They had to raise $3.4 billion in emergency funding over a weekend. The company that built its brand on democratizing finance had restricted the most democratic stock trade in history.

The payment for order flow controversy never goes away. Critics argue that PFOF creates a conflict of interest — Robinhood profits by routing user trades to market makers rather than getting users the best possible price.

The SEC has considered banning PFOF entirely. If that happens, Robinhood loses its largest revenue source.

Post-IPO performance was brutal. Robinhood went public in July 2021 at $38 per share.

The stock briefly hit $70 on meme stock momentum, then cratered to under $8 by mid-2022 — a 90% decline. The company laid off 23% of staff in April 2022 and another 23% in August 2022.

Revolut

The work culture has been toxic by multiple accounts. Reports from former employees describe 80-hour weeks, unpaid trial shifts for job candidates, extreme pressure, and a fear-based management style.

Storonsky has been accused of creating a "cult of overwork." High employee turnover and Glassdoor reviews paint a picture of a company that moves fast partly because it burns through people. Revolut has made public efforts to improve culture, but the reputation lingers.

Getting a UK banking license took three years. Revolut applied for a UK banking license in 2021 and didn't receive it until July 2024.

The delay was partly due to concerns about the company's financial crime controls and compliance processes. Without a banking license, Revolut couldn't offer full banking services or FSCS-protected deposits in its home market — a significant competitive disadvantage against licensed neobanks like Monzo and Starling.

Profitability came late. Despite having 45 million customers, Revolut didn't post its first annual profit until 2023 — eight years after founding.

The company had been investing heavily in expansion, new products, and compliance. While the 2023 profit ($545 million pre-tax) was impressive, proving sustained profitability remains the challenge for a company valued at $45 billion.

Robinhood

Robinhood is a stock, options, and crypto trading app. The core product lets you buy and sell stocks, ETFs, and options with zero commissions.

Robinhood Crypto adds trading for Bitcoin, Ethereum, and other cryptocurrencies. Robinhood Gold is the premium tier — higher interest on cash, larger instant deposits, and Morningstar research reports.

Robinhood Cash Card is a debit card that earns cashback and rounds up purchases to invest spare change. Robinhood Retirement offers IRA accounts with a 1% match on contributions.

Robinhood Legend is their new desktop trading platform aimed at active traders.

Revolut

Revolut is a financial super-app. Everyday banking covers current accounts, multi-currency wallets, and instant transfers.

Crypto trading lets users buy and sell 200+ cryptocurrencies. Stock trading offers commission-free investing in US and European stocks.

Savings Vaults are auto-saving features that round up purchases. Revolut Business is the commercial banking arm for companies.

Revolut Pay is their checkout solution for merchants. Travel insurance, device insurance, and medical insurance are bundled into premium tiers.

RevPoints is a loyalty program that earns points on every card transaction.

Robinhood

Sequoia Capital, Ribbit Capital, NEA, Index Ventures, Andreessen Horowitz, DST Global, D1 Capital

Revolut

Index Ventures, Balderton Capital, DST Global, Tiger Global, SoftBank, Coatue Management, D1 Capital