Robinhood has cancelled its much-hyped launch in the UK and has put on hold global expansion plans as the wildly-popular US no-fee stock trading app reels from a string of operational problems and attempts to focus on its home markets.
A statement from the company on Tuesday said that "a lot has changed in the world over the past few months," as a result the company had "made the difficult decision to postpone our UK launch indefinitely."
The brokerage platform will now close down its UK website, delete the names of people who had signed up to the waiting list and move most UK staff to projects associated with its core US mission.
The move comes just a week after Robinhood topped up its Series F funding round with an extra $320m, valuing the app at $8.6bn and meaning the loss-making company has no immediate cash concerns.
It also comes after a record few months for the company, which has added millions of accounts by retail investors keen to take advantage of the market volatility during the coronavirus pandemic. It now has 13m users.
But the increased demand has put a strain on Robinhood's systems, with the app experiencing several outages during March. At least one person has already filed a lawsuit against the company for losses that occurred during outages.
A spokesperson for the company said that the company was now trying to focus on its US markets: "As a company, we are refocusing our efforts on strengthening our core business in the US. 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."
The person added: "Although our global expansion plans are on hold for now, we’re committed to democratising finance for more people around the world. We look forward to the day when we can bring this mission to the UK.”
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The reversal points not only to the challenge of "blitzscaling" a company but also to the challenges of international expansion at a time when European fintechs such as Monzo, Revolut and N26 are all attempting to make their mark in the US markets.
While Robinhood has won over a mainly millennial audience with its zero-fee trading and friendly user interface, it was set to arrive in the UK at a time when the competition was heating up.
That includes retail-trading startups like Germany’s Trade Republic, 99 in Spain, Holland’s Bux, and the UK’s Freetrade. Investment-education startups like Finimize and Reitly have also emerged to enlighten people before they sign up to a neo-broker.