Robinhood Aims for the UK Market Comeback in 2024, Third Time Around

by Damian Chmiel
  • The platform has already undergone two unsuccessful attempts to enter the UK market.
  • It is undertaking its third attempt, initially without access to British financial instruments.
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Online investment app Robinhood has announced its impending launch in the UK, scheduled for early 2024. This marks the company's third attempt to expand in the country. The zero-fee platform will offer users the option to trade from a selection of 6,000 US stocks, including major companies like Tesla and Apple, with the convenience of 24-hour investing five days a week. Notably, the UK version of Robinhood will initially exclude UK stocks, options, and other derivatives.

Robinhood Targets UK Market with Third Launch Attempt

Jordan Sinclair, President of Robinhood UK, anticipates the 24-hour trading feature to be a significant draw for users, allowing them to respond promptly to market-moving news. The platform aims to allow users to act on investment strategies and news insights without the typical market hour constraints.

Robinhood's previous attempts to enter the UK market featured a waiting list that commenced and concluded in 2019, garnering over 300,000 sign-ups and a failed acquisition of British crypto-trading app Ziglu. Despite these setbacks and a $12 million impairment charge from the Ziglu deal, the company is moving forward with its UK expansion for the third time.

“My aspiration is to be one of the largest employers in England. Nothing would make me happier,” Vlad Tene, the CEO of Robinhood, expressed confidence in this new venture.

The launch comes with a Financial Conduct Authority license, signifying compliance with UK market regulations. However, the platform has drawn regulatory attention for its engaging, game-like interface, which some fear may encourage excessive trading.

Robinhood is implementing a referral system to attract UK customers. The company plans to generate revenue through various means, including securities and margin lending, interest on idle funds, and its Robinhood Gold subscription service, avoiding the payment-for-order-flow model, which is banned in the UK.

Robinhood's Transaction-Based Revenue Declines in Q3

Robinhood had previously mentioned its plans to expand into Europe in its third-quarter report for 2023. While the broker is gearing up for expansion, its transaction-based revenue between July and September decreased 11% year-over-year, amounting to $185 million. The revenue from options trading remained steady at $124 million. However, there was a notable drop in revenue from equities and cryptocurrencies, declining 13% and 55 %, respectively. From cryptocurrencies alone, the broker generated $23 million. This contrasts with the previous quarter's cryptocurrency earnings.

Meanwhile, the broker's total net revenue reached $467 million, marking an increase of 29% year-over-year but a decline of 4% quarter-over-quarter. The annual increase was attributed to "higher net interest and other revenues, partially offset by lower transaction-based revenues."

Furthermore, Finance Magnates reported two weeks ago that Robinhood has raised the interest rate for its Robinhood Gold service, now offering a 5.0% Annual Percentage Yield, the highest rate the company offers to date.

Online investment app Robinhood has announced its impending launch in the UK, scheduled for early 2024. This marks the company's third attempt to expand in the country. The zero-fee platform will offer users the option to trade from a selection of 6,000 US stocks, including major companies like Tesla and Apple, with the convenience of 24-hour investing five days a week. Notably, the UK version of Robinhood will initially exclude UK stocks, options, and other derivatives.

Robinhood Targets UK Market with Third Launch Attempt

Jordan Sinclair, President of Robinhood UK, anticipates the 24-hour trading feature to be a significant draw for users, allowing them to respond promptly to market-moving news. The platform aims to allow users to act on investment strategies and news insights without the typical market hour constraints.

Robinhood's previous attempts to enter the UK market featured a waiting list that commenced and concluded in 2019, garnering over 300,000 sign-ups and a failed acquisition of British crypto-trading app Ziglu. Despite these setbacks and a $12 million impairment charge from the Ziglu deal, the company is moving forward with its UK expansion for the third time.

“My aspiration is to be one of the largest employers in England. Nothing would make me happier,” Vlad Tene, the CEO of Robinhood, expressed confidence in this new venture.

The launch comes with a Financial Conduct Authority license, signifying compliance with UK market regulations. However, the platform has drawn regulatory attention for its engaging, game-like interface, which some fear may encourage excessive trading.

Robinhood is implementing a referral system to attract UK customers. The company plans to generate revenue through various means, including securities and margin lending, interest on idle funds, and its Robinhood Gold subscription service, avoiding the payment-for-order-flow model, which is banned in the UK.

Robinhood's Transaction-Based Revenue Declines in Q3

Robinhood had previously mentioned its plans to expand into Europe in its third-quarter report for 2023. While the broker is gearing up for expansion, its transaction-based revenue between July and September decreased 11% year-over-year, amounting to $185 million. The revenue from options trading remained steady at $124 million. However, there was a notable drop in revenue from equities and cryptocurrencies, declining 13% and 55 %, respectively. From cryptocurrencies alone, the broker generated $23 million. This contrasts with the previous quarter's cryptocurrency earnings.

Meanwhile, the broker's total net revenue reached $467 million, marking an increase of 29% year-over-year but a decline of 4% quarter-over-quarter. The annual increase was attributed to "higher net interest and other revenues, partially offset by lower transaction-based revenues."

Furthermore, Finance Magnates reported two weeks ago that Robinhood has raised the interest rate for its Robinhood Gold service, now offering a 5.0% Annual Percentage Yield, the highest rate the company offers to date.

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