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The US commission-free trading app, Robinhood, now plans to redirect resources to strengthen its core US business and foundational system in the wake of recurrent app outages and customer backlash over significant losses, per AltFi.
Despite these setbacks, the startup added 3 million new users this year and recently raised an additional $320 million for its Series F funding round, bringing the total to $600 million at an $8.6 billion valuation. Canceling the launch makes sense since the negative headlines would've weakened Robinhood's competitiveness against established UK players. The recent scandals have been costly for the trading app's reputation: Its mix of gamelike interface and complex financial instruments have led to accusations that it's taking advantage of inexperienced investors, while it's battling lawsuits over the app outages. All this would have likely discouraged prospective UK consumers from using its platform, especially since there are a number of existing alternatives, including eToro, Freetrade, and Revolut. With its recent megaround and fast-growing customer base, Robinhood shouldn't be in any hurry to expand abroad — instead, it should prioritize regaining US customer trust through additional educational tools. Want to read more stories like this one? Here's how you can gain access:
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