AMA: Ask our CEO Adam your questions about our upcoming crowdfunding round 🗣

The hard limit on crowdfunding in this round is dictated by EU regulations on crowdfunding without a prospectus, being €8m per 12 month period (c. £7m). As we raised £3m less than a year ago, that gives us £4m of room for this round.

We’ll release the specific details on price per share etc with the opening of the Crowdcube page, but I can say the pre-money valuation will be roughly double last time.

EIS also has a limit per 12 month period, being £5. So only £2m could be potentially eligible and we would allocate this on a first-come-first-served basis via Crowdcube. We don’t have advance assurance from HMRC yet, but have applied, and have never had an issue with SEIS or EIS eligibility in our past rounds.

Finally, on growth, we have some exciting plans that I’ll leave Viktor to talk more about. But I will say that the most effective channels for us have been referrals and content and we plan to double down on both.

16 Likes

Scramble mode would hide the values of the shares you own. That way you are not leaking your portfolio size when you show the app to someone.

5 Likes

Your contents been good. Can see this as a helper. Main thing I hear with people is they don’t know where to start with investing in shares. Or not confident in choosing a company. So more general content on having a variety of investments in portfolio (not investing all eggs in basket) and not all in shares. Maybe som individual people examples…Sarah earns x and invests in pension x and shares x etc… so far so good!

1 Like

I think our Product, Brand and Community are Freetrade’s greatest differentiators vs potential competitors that may offer similar charging structures.

When you look at various markets around the world in the stockbroker or investments space I think it is clearly not a winner takes all market. There does tend to be a relatively small set of dominant players that compete on factors beyond just price.

6 Likes

Thanks @saf, appreciated.
I like the idea. For privacy

When we vastly expand the universe of US stocks in the coming months that will include a lot of Asian companies (notably Chinese) that have ADRs listed in the States. But, yes, we do intent to offer Asian-listed securities but it’s not on the short-term roadmap for now.

EU expansion is up first, but we’d love to offer Freetrade beyond Europe in the future.

6 Likes

NZ and Australian banks still make too much money as no competition. Freetrade would do well there and all English too.

5 Likes

@adam, any plans to integrate with Monzo?

5 Likes

We’re only offering B Investment shares in this round and these would be available to all existing shareholders equally regardless of previous investments.

Having a large number of A shares carry an extra administrative / corporate governance burden with respect to voting matters (we’re not keen to run Freetrade like a public company yet!). There are also restrictions placed on A shares by our Articles preventing transfers or sales, so B shares offer more flexibility for shareholders to do as they see fit without requiring rather onerous procedures for the company to facilitate.

12 Likes

It continues to increase every week as we build trust with our customers. It’s always nice to see the big spike around payday. I expect to see an increase once we add the ability to transfer in accounts from other providers.

We’ll release more details in the investment documents.

9 Likes

I imagine this months portfolio sizes won’t grow too much, it will all be going direct to freetrade :joy:

8 Likes

We’ll wait to share specific numbers with everyone upon opening the Crowdcube pitch, but as a teaser, we went over 20k iOS users soon after taking off the waitlist earlier this month. Android uptake has been strong too!

We’re now a team of over 40 people at Freetrade HQ and hiring → check out our careers page here.

6 Likes

What would you say is the most efficient means to sort 1 million 32bit integers?

2 Likes

We’re aiming to have balance revenue not tied to one stream. Part of that we want to align our business incentives to the best interest of our customers, instead of having the incentive to push everyone into one type of product where we make money but would not be suitable to all customers.

That said, we anticipate that our top revenue stream in the future will come from monthly subscriptions for accounts other than the Basic starter account.

On HL and other stockbrokers talking about their ‘price improvement service’ and ‘market maker network’, it’s all a bunch of marketing spin. Almost every retail stockbroker in the UK connects to the same network of LSE retail market makers (aka RSPs) and so do we.

When we roll out our new core brokerage platform we’ll expand the venues we connect to beyond the traditional LSE network to include pan-European exchanges like Cboe and other liquidity providers. That should benefit our customers in the form of more venues to find the best execution for their orders.

On LSE exchange fees, that is only applicable for orders executed on the LSE order book. Trades placed through the RSP network are not subject to exchange fees.

13 Likes

I’d like to be able to open Freetrade as a tab in Chrome, too, but it’s not on the open roadmap yet. For now, we have lots of work to make the app even better, but stay tuned.

5 Likes

We would still earn some revenue from these customers if they decide to invest in foreign securities (FX) or hold cash with us (interest).

8 Likes

To the moon :rocket:

You’ll have to wait for the crowdfunding campaign for a longer discussion, or come talk to us on Tuesday.

7 Likes

I think it’s important to raise the right amount of capital for the stage the business is at. For us, we are lucky that we can still accomplish that through crowdfunding from our community. If/when that is not the case we’d look to consider institutional investment, as you rightly point out, we would not want to sacrifice growth potential for lack of capital to take advantage of it.

2 Likes

We have no plans to provide advice to our customers, so wouldn’t be building a roboadviser.

What we do have planned are automation tools and the ability to invest in fixed allocation portfolios (and potentially portfolios from other providers). We’re calling it Autopilot internally, what do you think of the name?

34 Likes

We are big fans of Crowdcube and think 1.5% is a fair fee for their service.

5 Likes