“As we add more customers, we are carving out a path towards building a business that is profitable and serves our customers’ best long term interest.”
Freetrade has announced it has raised over £1 million from existing investors as its latest crowdfunding campaign opened to the public, on the same terms as Freetrade’s institutional investors secured earlier in 2022.
The funding will be used by Freetrade for further growth and product development, including doubling down on expanding to new markets. The UK commission-free stock has recently secured a license from the Swedish financial regulator, thus obtaining an EU passport.
Prior to the crowdfunding campaign, Freetrade had reportedly signed term sheets with new investors to inject fresh capital at a £700 million valuation, but the deal was cancelled in January amid investors concerns over highly valued tech start-ups. The broker then raised £30 million in debt financing led by existing investors Molten Ventures, Left Lane Capital and L Catterton and new investors including Phoenix and Capricorn Capital Group.
Freetrade is building a self-clearing infrastructure and a proprietary FX solution
Freetrade has been building significant pieces of technical infrastructure over the course of 2022, including:
• Building a fully self-clearing European share dealing stack, that will allow Freetrade to scale its business efficiently across Europe.
• Building its own FX solution that allows Freetrade to go direct to foreign exchange markets and unlock significant savings.
• And a host of new features like a web app, advanced fundamentals and recurring orders.
According to Freetrade, subscription penetration levels have hit 77% for customers with at least £10,000 invested. The trading platform will continue to deliver new features while pushing beyond Sweden and into the rest of Europe.
Adam Dodds, CEO and Founder of Freetrade, said: “Our team has shown remarkable grit and focus this year as we’ve continued to execute against our plans and build a sustainable business. As we add more customers, we are carving out a path towards building a business that is profitable and serves our customers’ best long term interest.”
The UK fintech counts roughly 1.3 million customers, and has exceeded £5 billion in year-to-date trading volumes. On top of that, Freetrade, which generated revenues of £15.1 million in 2021, saw assets under administration (AUA) grow to £1.3 billion.
Freetrade’s app offers commission-free stock investment and is targeted mainly at millennials. The company has rebuilt its platform infrastructure for investing to allow traders to place their instant orders without having to pay a commission fee. Freetrade holds a ‘full scope firm’ license from the FCA.