Lightyear raises $8.5 million for its commission free trading platform
Lightyear, a commission-free trading platform built by veterans from Wise, has raised $8.5 million in seed funding which coincides with the platform opening itself up to users from its waiting list in the UK.
Over the last couple of years, there has been a spate of trading platforms that have advertised themselves as being commission-free and they have made good progress in different parts of the world by adding many retail clients to their userbase, the prime example being Robinhood. But Lightyear seems to have given a twist to this model by giving access to its users to be able to trade instruments from all across the world but at the same time, offering them a multi-currency account which means that they would be able to avoid any FX related charges.
This is one of the main drawbacks in many platforms that allow trading of instruments from different parts of the world as the single currency account would involve FX charges and commissions which would eat up into the profits a great deal making it unviable for small retail traders to dream of being able to trade stocks in other countries. But allowing FX charges up to £3000 a month to be free (0.35% FX charges beyond that), Lightyear improves the capacity of its traders to be able to trade any instrument from any market around the world without the hassle of FX conversion charges.
Martin Sokk, Co-founder and CEO at Lightyear, says: “Ten months ago Lightyear was just an idea, so we’re really excited to have raised a total of $10 million, hired a world-class team, and to be launching the first iteration of our app. There are more people in Europe investing now than ever before, but there’s still a very long way to go. Our goal is to give all of Europe access to the world’s markets without hidden fees and to make investing cognitively easy.”
This new seed funding round was led by Mosaic Ventures and included other investors like Taavet+Sten and Metaplanet. It is reported that the company would be using this to enhance its platform offering and also increase its userbase and continue to expand. While such commission-free trading platforms do have a nice ring to them, they generally bring in revenue through hidden charges and in ways that are not apparent to the casual trader. Robinhood is likely to suffer when one such revenue model is blocked by the SEC in the US. It remains to be seen how Lightyear is going to generate its revenue in the long term.
