British fintech Freetrade will seek a valuation of £ 650million in a new round of crowdfunding, double the value posted by the company earlier this year, as the trading app plans to go into crypto. currencies.
The group on Wednesday launched its seventh public fundraiser since its inception in 2016. The London-based start-up also raised funds from traditional venture capital investors, most recently in March, who were evaluating it. to £ 270million.
Freetrade’s sharp rise in valuation comes as retail equity trading exploded during the Covid-19 pandemic, bringing a rush of young clients and new cash to Robinhood brokers in the United States to established players such than the British Hargreaves Lansdown.
In the UK, clients opened 7.1 million investment accounts in the first 12 months of the pandemic, according to the most recent figures from the Financial Conduct Authority.
Freetrade, which recently surpassed £ 1bn in assets, is looking to capitalize on this momentum to expand across Europe, taking on continental rivals such as Trade Republic.
Adam Dodds, managing director of Freetrade, told the Financial Times in September that next year would see “battlefield Europe” among investment applications.
“What we have seen over the past two years is that the theory that Europeans don’t invest and don’t care about the stock market is not true,” he said.
Freetrade – which has 600,000 funded accounts, up from 150,000 at the start of the year – is expected to generate £ 15million in revenue this year, up from £ 3million last year. However, he still expected a loss of £ 26million before interest, taxes, depreciation and amortization as he continued to invest in technology and marketing.
The company, which charges investors foreign exchange fees on their transactions and offers a premium monthly subscription, said its new valuation target was a multiple of 13 times projected revenues in 2022, not counting new lines of business such as than cryptocurrency trading. He plans to launch it in the new year, aligning with the initiatives of his peers including Revolut, Scalable Capital in Germany and Robinhood in the United States.
The French mobile payment app Lydia announced this week that it will allow its 5 million users to trade cryptocurrencies, as well as stocks, ETFs and precious metals. “Driven by the pandemic, the trade has created an unprecedented appetite from retail investors,” the company said.
The push to crypto for Freetrade runs counter to a campaign by UK regulators to discourage high-risk investments among retail bettors. The FCA has said it wants to see fewer newbie investors getting into digital tokens and has expressed concerns that nifty trading apps “[make] it’s easier for consumers to make bad decisions ”- highlighting the sharp increase in registrations during the January craze for US“ memestocks ”.
Freetrade has 13,000 individual shareholders as its largest block of owners, alongside venture capitalists such as Left Lane Capital and Molten Ventures, previously known as Draper Esprit.
He has said he will open his crowdfunding to European investors for the first time as he seeks to raise up to £ 13million. The company hopes to roll out services across Europe next year, pending regulatory approval from Swedish authorities.