Commission-free stock trading app Robinhood set for 2020 UK launch

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
A mock-up of Robinhood's new UK app. Photo: Robinhood

Commission-free stock trading app Robinhood has announced plans to officially launch in the UK next year, marking its first market outside the US.

Fintech ‘unicorn’ Robinhood opened a waiting list for UK customers on Wednesday. An official launch will come in early 2020. It follows official approval from the City regulator in August.

Robinhood’s app will allow Brits to buy over 3,500 US-listed stocks and 1,000 global stocks, with no account minimum on orders.

Like the US product, the brokerage will charge no trading fees or foreign exchange charges. The company makes money through a subscription product that includes news, research reports, and margin trading, as well as earning interest on customer deposits and earning fees for order flow.

READ MORE: Free stock trading 'unicorn' Robinhood plans UK launch

Wander Rutgers, head of Robinhood UK, told Yahoo Finance UK the app would be tailored to the UK market.

“We’re investing significantly in building a product that is uniquely well suited to serve UK customer,” Rutgers said. “It’s not just about taking what we have in the US and putting it here, but also listening to users here.”

Robinhood was founded in 2013 as an online trading app, set up by two engineers who built high-frequency trading programmes for hedge funds in New York.

Robinhood cofounder and co-CEO Vlad Tenev. Photo: Robinhood

The Silicon Valley-based startup primarily targets millennials and has proved hugely popular in the US. The company has attracted 6 million customers and was valued at $7.6bn ($6.25bn) in its last funding round, making it a so-called tech ‘unicorn’. It has raised over $860m in funding to date.

“We’ll do well if we start seeing happy customers who are telling everyone they know about Robinhood,” cofounder and co-CEO Vlad Tenev told Yahoo Finance UK of the UK launch.

READ MORE: Hargreaves Lansdown 'learning lessons' from Woodford fiasco

Robinhood will compete against a wide-range of investment firms in the UK: everything from traditional banks like Barclays (BARC.L), to investment platforms like Hargreaves Lansdown (HL.L), and new fintech upstarts such as Revolut and Freetrade, which have similar business models to Robinhood.

“It’s a tough market,” Tenev said. “Customers here are discerning and obviously have high standards and have a history of high-quality financial services available to them.

“There is a sense that if we can be successful here, most other markets should be even more straight forward.”

Tenev said Robinhood planned to launch in more countries after the UK but wouldn’t be drawn on locations or timing.

Robinhood also plans to launch new financial products beyond investing for customers in the US.

“The goal is really to expand across two dimensions,” Tenev said.