Robinhood opens a UK brokerage service in its first international expansion

Amid declining revenues, Robinhood has set its sights on international growth, launching a UK brokerage and planning to launch EU cryptocurrency trading.

On November 30, Robinhood’s previously announced brokerage service was launched in the United Kingdom, marking Robinhood’s first expansion outside of the United States.

In the announcement, the company said that UK customers will be able to buy more than 6,000 US-listed shares and American Depositary Receipts (ADRs) at launch. Features include commission-free trading, high-yielding interest on uninvested cash, extended market trading hours, and free currency exchange between GBP and USD.

Robinhood pioneered a zero-commission, no-minimum balance brokerage model in 2013 with the aim of inspiring higher retail investment internationally as it did in the United States. To date, the company claims that this innovation has saved users billions of dollars in fees and helped drive growth by 27% in U.S. household equity between 2013 and 2022.

Although Robinhood’s revenue has declined recently, the push for internationalization continues. In the third quarter of 2023, transaction-based revenue fell 55% year-over-year, likely due in part to crypto bear market conditions.

Robinhood’s Location

In addition to the UK brokerage, Robinhood has also revealed its ambitions to offer cryptocurrency trading in the EU, pending regulatory approval. The company currently holds more than $3 billion worth of Bitcoin for cold storage to keep users’ cryptocurrency balances. Research shows that Robinhood also has the fifth-largest Ethereum wallet, with holdings worth more than $2.5 billion.

In the third quarter of 2023, cryptocurrencies accounted for 12% of Robinhood’s trading revenue, down from 24% in the third quarter of 2022. However, despite market volatility, crypto exchange expansion remains an important part of management’s growth projections as customer balances continue to grow.

Robinhood also faces macroeconomic challenges that could affect its global ambitions, including high inflation, rising interest rates, and a disposable income crunch.

Meanwhile, Alphabet Inc., an early Robinhood investor, liquidated the last of the 612,214 Robinhood shares it held prior to August. Due to the headwinds from Robinhood’s declining trading volume, the tech giant began to gradually reduce its stake.

Against this economic backdrop, Robinhood is expanding into the UK and other target markets for the first time, and the road ahead remains complicated.