Revolut Launches Trading App vs. Robinhood, eToro for Retail
UK fintech giant Revolut plans to spin off its wealth management business, valued at €8.5 billion (approximately $9.5 billion), into a standalone app in an attempt to compete with companies like Robinhood (HOOD.US) and eToro for a larger share of the retail market.
The app, initially named Revolut Invest, will offer nearly 5,000 assets, including US and European stocks, exchange-traded funds (ETFs), commodities, bonds, and new products like contracts for difference (CFDs).
Revolut states that stock and bond investments will incur a fixed fee of 0.25% or €1, while the charges for CFDs may vary.
Rolandas Juteika, Head of Wealth and Trading at Revolut, said that the app is currently being tested in Greece, Denmark, and the Czech Republic, and will be launched in other Eurozone countries by the end of this year.
He added that the company plans to double the number of tradable assets within the same timeframe.
Revolut's latest move is part of the company's CEO Nik Storonsky's ambition to create what he calls a "true global bank."
In this ambition, Revolut will offer all financial services and compete with industry giants like JPMorgan Chase (JPM.US) and Barclays (BCS.US).
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As the global wave of interest rate cuts begins, Revolut hopes to attract a large number of retail investors returning to the market with this new trading platform.
The company is entering an increasingly crowded field where companies like Robinhood, eToro, Trading 212 Group, and Freetrade have already made their mark, and newcomers are facing challenges.
However, Revolut's scale can help it establish a foothold in this area.
Founded in 2015, Revolut's valuation has reached $45 billion after a recent secondary share offering, more than double the market value of Robinhood.
The company also plans to go public with an initial public offering (IPO).
Although Revolut has allowed retail investors to trade on its main banking app, with a standalone app, Revolut will be able to target new customers who have not yet used its banking services, helping to open up to a broader base of retail investors.
The company also offers a premium subscription service called Trading Pro, which will provide lower commissions, higher trading limits, and analytical features.
Data shows that about 5% of Revolut's users are considered active users who trade more than once a week, and around 20,000 users have subscribed to Trading Pro.
According to Revolut's latest annual report, as of the end of June, the company has about 45 million customers, with more than 3 million users already using its investment services.
Rolandas Juteika stated that the assets under management for the company's wealth products have nearly tripled, from €3 billion at the end of 2023 to €8.5 billion.
Over time, Revolut will expand its Revolut Invest app to other jurisdictions, having obtained the necessary licenses in the UK, US, Singapore, and Australia.