Currently fundraising on Crowdcube, Freetrade is the new investing app designed to let users invest in stock markets around the world, with zero commissions or fees.
Having raised 70 percent of their £300,000 target, the app has gained FCA regulatory cover and is preparing to open accounts, with over 4,500 members on the waiting list.
A 2016 survey has shown that 46 percent of Britons would like to invest in equity shares, but don’t know how. Taking advantage of this statistic, Freetrade hopes to make investing easier saying “goodbye to jargon, complex charts, and account opening forms.”
The financials for the app remain simple: Freetrade has a freemium business model with the basic accounts and trades being free. The app plans to earn revenue in three key ways:
1. Premium share dealing – £1 commissions for certain types of trades
2. Premium accounts – ISAs, SIPPs and account extras
3. Treasury income – they will make money like a bank.
“After twelve months of operations, we project a revenue run-rate of £3.6 million with gross margins of 77%” Adam Dodds, Cofounder & CEO writes on the crowdfunding page.
“Since our Crowdcube SEIS raise in July 2016 (170% overfunded in 12 days), we have obtained FCA regulatory cover as an appointed representative, set up our capital market service providers and developed our first product for beta release.
“We won Apps World London, have been backed by Octopus in their accelerator and without any ad spend, we’ve attracted over 4,500 members to our waiting list.”
The exit strategy remains open, but the team have already had some interest from a range of acquirers which will be an option. For example, FutureAdvisor sold to BlackRock for $200m, five years after being founded.
So far, Freetrade has raised over £210,00 from 188 investors. They have a pre-money evaluation of £4,000,000 and offer an equity of 6.98 percent.