Thank you Stephen. I’ve been saying this as well but seems to be passing over peoples heads 
The most important metric at this stage of a business is revenue/ profit growth - everything else just is a proxy measure. Sure HL has AUM of 120x FTs but it’s revenue/ profit margins is growing at a few % per year. I don’t have a revenue growth figure for Freetrade but given it’s grown users numbers by 5x or 500% over the past year, and assuming the fee paying % of users has stayed fairly constant it’s going to be pretty big
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Not really no, unless there was a mandatory flat account fee. Because Freetrade doesn’t exist in a vacuum their ability to raise revenue is going to be coupled to AUA. After all how many £909 accounts are going to spend £120 (1320) bps on a FT+ subscription, or even an ISA subscription? They wouldn’t have an account left to manage after 8 years. So users with low assets won’t meaningfully impact revenues. What we really want to know is the # of FT+, ISA, SIPP subscriptions and the £FX - AUA is a much better way of estimating those than # signups.
By the same logic HL shouldn’t care about AUA because they charge £11.95 / trade, but of course that only represents good value to those with large assets.
I’ve combined a couple of sheets from my model that might help illustrate this AUA-centric approach:
(This reverse model is very crude I hadn’t really intended on sharing it, so I wouldn’t read too much into it - but feel free to copy and play around with the numbers)
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The only way users with high assets will impact revenues is if we change our charging model to take advantage of those high assets. How is someone with a £1 million portfolio but makes very few trades a better customer than someone with £1,000 who also makes a few trades?
Freetrade current business model is not based on asset size. If we start making more revenue than HL then as a business we are worth more than HL because at the end of the day neither Freetrade nor HL actually owns those assets it manages.
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FX fees and interest that FT make?
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Because the person with £1m more likely pays for FT+, ISA, SIPP - the person with £1,000 probably pays a few pennies of FX.
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In all seriousness when roughly will we find out? This week? This month? Before Xmas?
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How does that model track against previous crowdfunding valuations?
Filming in progress 
we’ll get update soon
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I’m not sure I understand the question, it’s a reverse valuation model - to help you discover what assumed growth is baked into a price, similar to how you’d use a reverse DCF (except this is relative).
If you had reliable AUA figures you could input a previous round into it, you wouldn’t expect the same result though (unless people are no more optimistic about FT’s future - which would be odd given their success).
Got it thanks - will have a play about with it later!
Here’s a bit more of a description for how it’s used as it’s not particularly clear:
- You start with a price/valuation as your input (i.e. when we get it the crowdfunding price)
- You make assumptions about FT’s business
- You look at how peer business are valued
- The model then tells you what sort of growth is anticipated (to bridge the gap between 2 and 3)
You can then make an assessment on if that assumed growth is too low (in which case that’s a buying opportunity) or too high (selling opportunity). It’s not designed to predict the next funding price, rather it’s to better understand what a given price means.
So with my inputs (which obviously may be different to someone else’s) it says if FT raised at 10.50 (random figure - replace with the real value) it implies FT would grow to 4.4m users at £13bn assets, you can then compare that to your expectations / guidance provided by FT.
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It’s a horse!
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It’s a Unicorn in a horse costume for Halloween 
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Not sure why the doom and gloom / disappointment from some. We are just getting started and this is an incredible achievement. Believe me Freetrade wouldn’t be broadcasting this unless they were delighted with reaching the £1BN AUA milestone. Steady as she goes 
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With an average CAC of only £8,£4 for the recommender and £4 for the new customer then that is magnificent.
Good point it’s still an amazing achievement for FT and they are well on track for their goals.
I think a lot of us just got swept up in the crazy user growth and maybe had unrealistic expectations.
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Cheers, I get that HL have better features and have been going for longer. I just wanted to highlight that it’s not like they have 2 x more funds per user, it’s like 100 x more!
I’m sure Freetrade will be closing the gap over time!
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