Freetrade returns to crowdfunding as investors reject higher valuation

abdelaziz Fathi

Freetrade, which calls itself a challenger stockbroker, is set to launch its eighth crowdfunding round after reportedly failing to raise fresh investment at a higher valuation.

The UK commission-free stock trading platform has scheduled September 14 for holding its latest funding round, which will give over 17,000 existing investors the opportunity to invest in a convertible loan note.

Pre-registration for the round is now open to prospective backers 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, a big step forward in its European expansion.

Adam Dodds, CEO and Founder of Freetrade, said: “Since the start of the year we’ve seen a remarkable acceleration in our product development. Over the coming months, we’re focused on adding even more value to our subscription plans, building a product that shows that commissions in the UK are turning into a thing of the past.

Per a letter obtained by the Financial Times, Freetrade signed term sheets with new investors to inject fresh capital at a £700 million valuation. The deal was cancelled in January as investors turned wary of highly valued tech start-ups as stock markets plunged.

Instead, Freetrade raised £30 million in debt financing led by a clutch of existing investors. The growth funding round was bankrolled by Molten Ventures, Left Lane Capital and L Catterton. They were joined by new investors including Phoenix, an investment manager with over $100 billion in assets, and Capricorn Capital Group, a private investment firm.

The news comes as Freetrade’s growth continues to surge. 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. Before that, clients were allowed to invest in stocks and ETFs, but only if they accept to execute their trades at the end of business day, otherwise the broker charges £1 per trade.

Rather than partnering with an established broker, Freetrade holds a ‘full scope firm’ license from the FCA.

  • Read this next

    Podcasts, Women of the Industry

    FF Podcast delves into the rise of prop trading as Brokeree releases Prop Pulse

    In the latest FinanceFeeds Podcast, Tatiana Pilipenko discusses Prop Pulse, Brokeree Solutions’ platform for prop firms and retail brokers aiming to delve into prop trading. Offering a flat fee structure, Prop Pulse emerges as a scalable solution in an era where successful traders increasingly prefer prop firms over traditional retail brokers.

    Inside View

    Scalping or day trading?

    Among the many popular trading styles with both beginners and experienced traders are scalping, which allows you to extract small portions of profit from each price movement, and day trading, which aims to trade over a single day. In this article, you will learn what scalping and day trading are and their differences and peculiarities. Ultimately, you will learn what to look for to understand which trading style is right for you.

    Crypto Insider

    Unveiling Plasma Next: INTMAX’s Solution to Scale Ethereum with Stateless Layer

     INTMAX has launched Plasma Next on the mainnet α, a groundbreaking Layer 2 zkRollup, revealed by co-founder Leona Hioki at ETH Denver. This innovation offers scalability with constant costs per block, merging Plasma’s scalability goals with zkRollups’ security.

    Fintech

    Nuam selects Vermiculus for clearing system in Chile, Colombia, and Peru

    “We are proud to deliver a system that plays an integral role in the core of this historical merger, empowering one of Latin America’s most crucial markets with VeriClear’s state-of-the-art technology, together with our deep market expertise.”

    Retail FX

    Moomoo launches super app in Malaysia

    “As an investment platform connecting 21 million retail investors globally, we envision collaborating with exchanges, regulatory bodies, and partners in the visible future to become the gateway, connecting Malaysia’s investment products to global capital and investors.”

    Executive Moves

    FXPA elects Joe Hoffman as new Chair in its 10th anniversary

    “The opportunity to serve as Chair of the FXPA is truly an honor, and I am committed to upholding the exceptional work of a FXPA. Given the recent market fluctuations due to global tensions, inflationary pressures, shifts in monetary policy, as well as the outcome of the US election and the risk of recession, brings the potential for more FX volatility in 2024. I am dedicated to expanding the FXPA’s membership and I’m excited about collaborating with all members to echo the unified voice of the FX market.”

    Market News

    Eurozone Fights Stagnation Whilst Stock Indices Rally

    European stock markets are defying economic gloom as they continue to soar to all-time highs, showcasing resilience amidst broader economic challenges.

    Web3

    Lisk Partners with Indonesia’s Communications Ministry to Boost Web3 Startup Ecosystem

    Discover the strategic partnership between Lisk and the Indonesian Ministry of Communications and Informatics, aimed at propelling local Web3 startups to new heights through comprehensive support and education.

    Executive Moves

    Admirals appoints founder Alexander Tsikhilov as CEO

    “Striking the right balance between sourcing new talent and developing and harnessing the strength and capabilities of our current workforce, is key to achieving our vision.”

    <