Robinhood's third attempt to conquer the UK: will persistence pay off? 🤔; Shift4 Payments CEO rejects takeover bids 😤; Revolut streamlines hospitality payments with new POS 👀

FinTech is Eating the World, 19 March

Hey Everyone,

Good morning! Today’s issue is the best one yet as we’re looking at Robinhood and their third attempt to conquer the UK (why it makes sense & will persistence pay off + some deep dives & bonus reads about Robinhood), Shift4 Payments that rejects takeover bids (a recap of what’s happening + why Shift4 might be worth your money in 2024), and Revolut that streamlines hospitality payments with new POS (going head-to-head against Square & PayPal, opportunities & challengers + some bonus dives into Revolut). Let’s jump straight into the hot stuff 🌶

Robinhood's third attempt to conquer the UK: will persistence pay off? 🤔

The launch 🚀 Robinhood HOOD 0.00%↑, the Silicon Valley-based commission-free trading app, has finally launched in the UK. Again and after two previous failed attempts 😬

But the company's timing seems to be spot-on, as the UK market is ripe for disruption, with a growing interest in retail investing and a desire for more accessible, low-cost trading options.

Let’s take a closer look at this.

More on this 👉 Robinhood's UK offering includes commission-free trading, zero foreign exchange fees, and an attractive 5% AER on uninvested cash and $2.25M FDIC protection. For the perspective, Revolut currently offers 5.10% APY in flexible accounts while Lightyear (a more direct competitor) has 4.5% APY on your GBP.

The company also provides access to over 6,000 US-listed stocks and plans to introduce local stocks and tax wrappers in the future.

However, its margin lending feature is currently on hold pending discussions with regulators.

Why UK? 🤔 The UK market presents unique challenges for US-based trading apps like Robinhood. European investors prefer localized offerings, including access to domestic stocks, local currencies, and tax-efficient investing vehicles.

Additionally, the UK has a well-established set of homegrown WealthTech startups, such as Freetrade or Lightyear, which have already captured a significant share of the market. Then there’s Public and WeBull which have recently entered the UK as well.

Despite these obstacles, Robinhood's persistence and strong brand recognition could work in its favor. The company's US success story and its ability to attract younger investors through user-friendly features and low costs may resonate with UK consumers looking for alternatives to traditional brokers. And once attracted, Robinhood’s gamified experience might keep them hooked and stay in the game for quite some time.

It won’t be easy… 👀 Even with all the potential upside and clear advantages, Robinhood's launch comes during a challenging economic environment in the UK, with a recent recession and increased tax burdens limiting individuals' investing capacity.

The company will also need to contend with changing attitudes towards investing, as many Britons prefer lower-risk options like cash savings accounts, especially in the current high-interest environment.

Finally, the tract record is against Robinhood’s favor - we still have very few examples of companies from the US making it huge in the UK/Europe in finance.

✈️ THE TAKEAWAY

What’s next? 🤔 Robinhood's success in the UK will essentially depend on its ability to adapt to local market conditions, offer competitive features, and effectively engage with potential customers. If leveraging its brand recognition and user-friendly platform, the company can navigate the regulatory landscape, introduce localized offerings, and capitalize on the growing interest in retail investing, it may finally gain a foothold in the UK market and disrupt the WealthTech landscape. Looking at the big picture, a successful UK launch could serve as a stepping stone for Robinhood's broader European expansion plans. By establishing a strong presence in the UK, the company can gain valuable insights and experience that will help it tailor its offerings to other European markets.

P.S. It seems like Robinhood is planning to run its European operations out of Lithuania 🇱🇹:

ICYMI: Robinhood posts surprise profit in Q4 2023, eyes return to growth 😳📈 [a closer look to see whether Robinhood is worth your time and money in 2024]

If you’re in FinTech, you’re in Media: Robinhood acquires Chartr 📊

Not just for degenerates: Robinhood is now luring wealthier investors 💸