Stock trading app Freetrade raises $69 million

U.K. challenger stockbroker Freetrade has raised a $69 million Series B round led by Left Lane Capital. The growth fund of L Catterton and existing investor Draper Esprit also participated. Freetrade operates a stock trading app and has managed to attract 600,000 users in the U.K. — they generated £1 billion in quarterly trade volume.

Freetrade has reached a post-money valuation of $366 million following today’s funding round. In December 2020, the company generated $1.4 million in revenue.

After signing up, Freetrade lets you buy and sell shares from the company’s mobile app. If you want to invest in companies with expensive shares, such as Alphabet (Google’s parent company), you can buy fractional shares. Instead of spending over $2,000 for a single share, you can buy one-tenth of a share for one-tenth of the price.

Freetrade lets you access U.S. and U.K. stocks as well as ETFs. Like Robinhood in the U.S., the company doesn’t charge any trading commission for basic orders — there’s a 0.45% foreign exchange fee on transactions in foreign currencies. Unlike Robinhood, the company doesn’t want to push you toward day trading.

In addition to free general investment accounts, Freetrade offers individual savings accounts (ISA). It’s a type of account specific to the U.K. that encourages long-term investments as tax on capital gains goes down over time. Freetrade charges £3 per month to open an ISA.

The company also offers pension savings accounts (SIPP). You get tax relief on contributions. If you live in the U.K., (Read more...)