I am eager to buy some shares. Message me if interested
It’s ok, you’ll have a chance real soon:
Do we think the new around will be higher or lower than the previous funding round price? (C 52p for R3)
If it’s lower then something has gone badly wrong
I wouldn’t be surprised if the sp is at least double the last round, possibly more.
We now have a fully working app and platform (with new rollout coming)
We have 10,000+ customers with 80,000+ waiting
We have trades
We have money flowing
We have swag items
When we were valued at 52p all we had was the promise of an app - at some point.
£50-100m valuation on the next round wouldn’t surprise me at all.
FreeTrade can and will scale.
But bear in mind a lot of things we have now were priced in during R3
Now the pricing will be based on future revenue growth and EU expansion.
We have to consider much larger competitors have also thrown their hat into the ring of share trading e.g. revolut. That could negatively impact on raise price.
It will be interesting once it’s released! Free trade obviously want the raise price higher as it would be a much harder story to sell otherwise! Here’s hoping!
The price more than tripled from R2->R3, I would expect another decent jump
The valuation at R3 was roughly £20M if I remember correctly. I would expect that to be quite a bit higher with the app released and the amount of interest in buying shares
That’s true but the risk of failure is significantly lower now. We know the team can deliver
Based on other Series A rounds it should be somewhere between £40 to £60m.
It’ll be cool to be able to buy shares in the next round via the Freetrade app
Agree with both these points! I think it will become an acquisition target, especially once it enters Europe. Interactive Investor has made about 4 acquisitions alone!
I hope Adam fends them off, I want to see Freetrade grow into a successful company, not get snapped up by one of the existing big players
I am sure it will depend on the offer. If it is 10 figures or above, it is at least forth considering.
Getting a bit ahead of ourselves guys! It would be great though!
£40 to £60,000,000 is quite the range!
Please don’t do it on Crowdcube again. No one trusts them anymore. And the 1.5% fee is a real turn off.
I was thinking about valuation last night, it really depends on whether it’s done early in the year or late in the year given the rate of growth. Assume they’ll want to raise well before they run out of cash but the valuation itself (at this stage) is a vanity metric. It will also depend on whether they look at the VC route and whether the VCs bite on something which is, as yet, unproven in the UK.
Presumably the extra money last year allowed them to grow faster than planned so they’ll be burning through the cash and will no doubt want a significant war chest if possible. The fundamentals of their valuation, i imagine, are at least in some way related to assets under management and total numbers of users which, at the moment and understandably, are very low. Appreciate it is a different business model but the valuation should at least be linked in some way to user numbers and AuM which currently wouldn’t impress against the market.
There is no advantage to having a ridiculously high valuation, it is vanity and would create problems later on. If they can show evidence of significant user growth that will be the biggest driver of their valuation. Building the app and the underlying infrastructure shows that they can deliver, and they must be an attractive acquisition target but I think we’re all looking for them to remain independent and see what they can achieve.
My guess would be mid-year for a valuation of double the current one. If the user numbers scale quickly then it could be triple? What are your thoughts?
My guess: valuation is driven in the next 6 months simply by what price Freetrade thinks it can sell for and will fit in with the future fundraising plans.
For round 4, I could see 2x but maybe not more unless the user numbers are exploding or some recurring revenue is starting to happen (some revenue is happening already through instant trades but I don’t think numbers have been disclosed, and I mean recurring rev like alpha, which the blog post hints is further off than the fundraise).
For a broker that doesn’t charge on AuM I guess the next set of valuation metrics would be user numbers who are trading monthly, trading volume, asset inflows from transfers, or rev.
Think you’re right - you could see HL offering a trade sale with the intent of making FT into “HL lite”, or Revolut/similar looking to buy in the solution.
To clarify, I was meaning potential for a future acquisition would lift the share price, increase VC appetite and lower the risks. I don’t think it’s something that would be in shareholders interest for quite some time…
I think it will depend more on whether Freetrade wants venture capital at this stage (and can find one which adds value in addition to money). Different VC’s invest at different stages and Freetrade has loads of potential so it will get offers!