Victor Ugochukwu · Dec 14, 2020 . 5min read
Robinhood halts UK expansion, scraps trading app indefinitely
Stock trading app Robinhood postpones UK expansion amidst user interface outages and coronavirus scare, with renewed focus on US customers.
By Shilika · Jul 22, 2020 . 6min read
According to CNBC, Robinhood, a California-based fintech firm, announced its decision to indefinitely postpone its plans of UK expansion. The UK waitlist for a trading app was opened in November 2019. About more than 250,000 people had already signed up. However, recent events have forced the company to reconsider this decision.
A Robinhood spokesperson has said that their efforts are now focused on strengthening their core business in the US. Keeping global domination plans on hold, the company wants to improve their user interface first. As of now, there are over 13 million users on its database.
“We know many people in the UK were excited to invest through Robinhood, and we regret that we cannot deliver our product to UK customers in 2020. Although our global expansion plans are on hold for now, we’re committed to democratizing finance for more people around the world. We look forward to the day when we can bring this mission to the UK,” said a Robinhood spokesperson.
A major cause behind this decision can be the coronavirus pandemic. It has affected global finance drastically and toyed with expansion plans, with travel and connectivity being put at stake. The spike in trader numbers on Robinhood during this time also exposed the flaws in its algorithm and UI.
Also, the company received a lot of flak after a 20-year-old trader Alex Kearns committed suicide after mistakenly believing he had lost $730,000 on the app. Robinhood vowed to amend options trading rules following this tragedy. It also donated $250,000 to the American Foundation for Suicide Prevention. But, the damage to its reputation had been done.
Further Steps by Robinhood
The UK website for the app is to be shut down as per regulation. The decision was conveyed to prospective customers in an email. Currently, the company is working on dealing with the outages that have been occurring with heavy traffic.
Robinhood promised to delete all email addresses and customer data to adhere to local privacy regulations. Their team of 10 UK employees will be transferred to US-based projects or supported to find a new job. However, a core team will remain in the UK.
In spite of this hurdle, the tech giant stays strong on the financial front. Its current valuation is about $8.6 billion.
Alternate Trading Apps
Some competitive trading apps in the UK are Freetrade, Hargreaves Lansdown, eToro, Revolut and Bux. People looking for stock trading options in the UK can turn to these startups. In conclusion, Robinhood’s decision will impact the UK stock trading market. However the extent of the impact is unclear.