Freetrade
Trade Stock For Free
Business: Freetrade
Founded: 2016, London
Mission: To make investing in the stock market accessible to everyone in the UK
Founders: Adam Dodds, André Mohamed
Employee/Investor №1: Viktor Nebehaj, Xoogler
Total employees: 6
HQ: London, United Kingdom
Stage: Seed
Where did the idea for Freetrade come from? We think the financial system should help regular people, not just the wealthy.
Ten years on from the last major stock market crash, not much has changed. A cosy group of financial institutions still levy what is essentially a tax on anyone wanting to participate.
Only 1.5% of under 35s in the UK invest in an Individual Savings Account (ISA) for stocks and shares, a tax-sheltered investment account, each year.
The key deterrent is high commissions. If you have only £50-100 each month to invest, a £12 transaction fee is huge. That means many young people are missing out on the financial opportunities of the stock market.
Pricing for capital markets firms is as arbitrary as it is for telecom companies. Prices are completely detached from the underlying costs; they charge as high a price as they can get away with.
How does your startup solve this problem? We’re building a fully-fledged, independent stockbroker for the new investment generation where people don’t pay to trade. Accessing and managing your trading will be as simple as downloading an app on your phone.
We just received direct authorization by the Financial Conduct Authority (FCA), which is the financial regulator in the UK. We’ll start rolling out the app in early 2018.
Our sign up list is on track to hit 25k members by the end of the year. Not bad for a pre-launch product focused on one European market!
What’s been your best startup experience to date? Our waitlist has quadrupled in the past few months. Our idea has turned into an active community that gives us feature requests, stocks to include in our app etc.
Recently I took part in a Xoogler.co panel discussion about crowdfunding and building startups. I was surprised to see people from our Freetrade community in the audience!
Scalability is a startup buzzword. While it’s certainly important it was also great to chat with real people from our waitlist community who already support our mission.
I originally connected to the team at Freetrade thanks to crowdfunding site Crowdcube. Their business model piqued my curiosity as an investor.
Crowdfunding helped me initially invest in this idea. By being able to commit a meaningful amount, Freetrade was able to get their idea off the ground. Now it’s amazing to see other small investors take a similar leap of faith.
We’re proud to be disrupting traditional funding models for startups as well as the stock trading market.
Crowdfunding is in our DNA. We love that even if venture capital firms participate, they get the same terms as a regular investor pledging £10.
What’s the worst part of the startup journey so far? If you raise purely through crowdfunding be prepared to manage your startup’s public perception. The media seems to value venture capital investment more highly than raising money through other routes, even if the investment amounts are comparable.
We see similar stage startups (seed or pre-launch) with less investment and traction garnering more mainstream media attention because the investment came from a VC.
We cringe a little when we see that.
Is there a business lesson you learned at Google that’s helped you on your startup journey? I spent seven years at Google. That experience had a profound impact on how I work, hopefully some of it useful!
When I started at Google in 2005, it was very much of a startup in Dublin. I discovered I was very comfortable with that, which was probably indicative of my future direction. There were less than one hundred Googlers in Europe. We didn’t even have hot food at the campus, if you can believe that!
I’m not sure if the motto “it’s better to ask forgiveness than permission” still applies at Google these days but that’s the sort of business lesson I learned. Not surprisingly it’s fully applicable to startups, especially early-stage startups.
Even though we’re a fully regulated financial institution now, we’re also a startup with constrained resources.
If something’s mission-critical, you’d better execute on it. Do what seems right instead of waiting for everyone‘s seal of approval.
Are you still in touch with Googlers today? Five years after leaving Google, the personal network I built still contributes a lot. For example, our app runs on Google Cloud. Recently a Googler pointed out to me that we could get free credit for that!
What does it mean to you to be a Xoogler? It means being part of a community that shares much of the same set of experiences. Also, even though being a Xoogler is becoming less exotic, it still provides social validation in many contexts.
How can the Googler and Xoogler community help your startup? If anybody in this community is or knows engineers looking for a mission-driven startup to join, we’re hiring! We’ll also be expanding our team across more types of roles.
Thanks Viktor!
