Stock trading app Robinhood gets UK broker license

Robinhood, the Silicon Valley-based stock trading app that was recently valued by investors at $7.6 billion, has received regulatory approval in the U.K., breaking cover on its plans to set up shop in London (as reported exclusively by TechCrunch seven months ago).

Specifically, Robinhood International Ltd., a Robinhood subsidiary, has been authorised by the Financial Conduct Authority to operate as a broker in the U.K. (with some restrictions based on the permissions the company sought). This gears Robinhood up for a U.K. launch, although the company is staying tight-lipped on when exactly that will be.

In addition, Robinhood is disclosing that it has appointed Wander Rutgers as president of Robinhood International. He joins from London fintech Plum, where he headed up the startup’s investing and savings product, and prior to that is said to have led product, compliance and operations teams at TransferWise.

At Robinhood, Rutgers will lead the U.K. business and oversee the company’s new London office, which has already begun staffing up. Sources told me in April that Robinhood was busy hiring for multiple U.K. positions, including recruitment, operations, marketing/PR, customer support, compliance and product.

The company tells me it is also building out a London-based user research team so it can better find product-market fit here. Crudely building a localised version of Robinhood obviously won’t cut it.

Meanwhile, news that Robinhood is ramping its planned U.K. launch is interesting in the context of local fintech startups that have launched their own fee-free trading offerings.

First out of the gate was London-based Freetrade, which chose very early on to build a bona-fide “challenger broker,” including obtaining the required license from the FCA, rather than simply partnering with an established broker. The app lets you invest in stocks and ETFs. Trades are “fee-free” if you are happy for your buy or sell trades to execute at the close of business each day. If you want to execute immediately, the startup charges a low £1 per trade.

And just last week, Revolut finally launched its fee-free stock trading feature, albeit tentatively. For now, the feature is limited to some Revolut customers with a premium Metal card (which itself entails a monthly subscription fee) and covers 300 U.S.-listed stocks. The company says that it plans to expand to U.K. and European stocks as well as Exchange Traded Funds in the future. Noteworthy: My understanding is that Revolut doesn’t have its own broker license but is partnering with U.S. broker DriveWealth for part of its tech and the required regulatory authorisation (it also explains why, for now, Revolut is offering access to U.S. stocks only).

In contrast, Freetrade has long argued that to innovate within trading, you need to build and own the full brokerage stack. It was the first mover in this regard amongst the new crop of “fee-free” trading apps in the U.K., though others, including Netherlands-based Bux and now Robinhood, have since taken the same path. Only time will tell if Revolut will be forced to do the same.

Another tidbit is that Revolut and Robinhood share investors, namely Index and DST. That makes for an interesting subplot as the two unicorns encroach on each other’s lawn. No conflict, no interest.

Google and Twitter are using AMD’s new EPYC Rome processors in their data centers

Google and Twitter are among the companies now using EPYC Rome processors, AMD announced today during a launch event for the 7nm chips. The release of EPYC Rome marks a major step in AMD’s processor war with Intel, which said last month that its own 7nm chips, Ice Lake, won’t be available until 2021 (though it is expected to release its 10nm node this year).

Intel is still the biggest data center processor maker by far, however, and also counts Google and Twitter among its customers. But AMD’s latest releases and its strategy of undercutting competitors with lower pricing have quickly transformed it into a formidable rival.

Google has used other AMD chips before, including in its “Millionth Server,” built in 2008, and says it is now the first company to use second-generation EPYC chips in its data centers. Later this year, Google will also make available to Google Cloud customers virtual machines that run on the chips.

In a press statement, Bart Sano, Google vice president of engineering, said “AMD 2nd Gen Epyc processors will help us continue to do what we do best in our datacenters: innovate. Its scalable compute, memory and I/O performance will expand out ability to drive innovation forward in our infrastructure and will give Google Cloud customers the flexibility to choose the best VM for their workloads.”

Twitter plans to begin using EPYC Rome in its data center infrastructure later this year. Its senior director of engineering, Jennifer Fraser, said the chips will reduce the energy consumption of its data centers. “Using the AMD EPYC 7702 processor, we can scale out our compute clusters with more cores in less space using less power, which translates to 25% lower [total cost of ownership] for Twitter.”

In a comparison test between 2-socket Intel Xeon 6242 and AMD EPYC 7702P processors, AMD claimed that its chips were able to reduce total cost of ownership by up to 50% across “numerous workloads.” AMD EPYC Rome’s flagship is the 64-core, 128-thread 7742 chip, with a 2.25 base frequency, 225 default TDP and 256MB of total cache, starts at $6,950.