Member Article
Zero-commission stockbroker looking to democratise stock market trading after £1.1m fundraise
App-only stockbroker Freetrade has announced it has raised £1.1m in just 12 days on crowdfunding platform Crowdcube as it gears up for its full launch this year.
Operating on a zero-commission model, the app is aiming to democratise stock market investing by removing traditional barriers to entry such as minimum account balances and punitive per trade commission fees in what would be the first product of this type in the UK.
The likes of Robinhood and Loyal3 both operate similar models in the USA, but until now UK traders have had to stump up commissions in the region of £10 per trade from traditional stock broking services.
Freetrade plans to make its money by charging for premium services and bigger trades, including £1 commission per £1,000 invested as part of its premium share dealing account and associated charges for its self-invested personal pensions (SIPPs) or stocks and shares Individual Savings Accounts (ISAs).
Explaining the inspiration behind the app, Freetrade Co-Founder, Adam Dodds, said he stunned by how difficult it was for regular people to get access to stock trading in the UK.
He commented: “When I moved to London a few years ago I was astonished and shocked at how expensive and intimidating it was to become an investor.
“This is why Freetrade was created, to make investing in the stock market easy and affordable for everyone.”
Now, Dodds and fellow co-founders Davide Fionranelli and Andre Mohamed are looking to tap into the thirst from millennials who would like to get into investing but are unsure how or do not have the financial means to do so.
The appetite is clearly there with Freetrade’s latest crowdfunding round overfunding by 360% and coming less than 10 months after its first £100k crowd raise, giving the startup a firm footing ahead of the launch of its iOS app in 2017 followed later by its Android app.
Davide Fioranelli, co-founder of Freetrade commented: “We live in a digital, smartphone era and millennials, who face more financial pressures than any previous generations, deserved the right to start investing for their future.
“Stockbrokers in the UK simply don’t serve this next generation of investors. Commissions are expensive, minimums are high and it’s complicated to start investing. It can’t continue like this. Say goodbye to jargon, complex charts, and account opening forms, all you need is our app.”
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