If they can do both great. But the series C shouldnāt suffer in favour of a crowdfund in my opinion.
I think the Crowdfunding rounds can gain Freetrade customers who are more likely to stick with them. If all other things were equal between Freetrade and Trade Republic Iād stay with Freetrade as I own a very small part of it.
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For that to be so, growth of customer base would have to be no more.
If the customer base keeps climbing the valuation will have to follow.
How will it develop. I donāt know.
Those numbers I mentioned are there in relation to the valuation of a direct competitor. Which is a valid method. Like buying a house in a given neighborhood. The price of a deal impacts the price of the following deals.
In the end of the day each individual have to make their decisions and take responsibility for it
I disagree, money matters in an International expansionā¦
to give you an idea N26 spent over Ā£20m in their unsuccessful expansion in the UKā¦
If FT plans to expand in several European countries with few millions they are make a dangerous bet in my opinion and it would be better to just focus in the UK and become n2 in the market after HL (that would means a Ā£5bn company)
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that means a huge discount relative to the neighbourās house sale price
Sure. The upside is limited. Will it be limited to 50% or 500% or 1000%? I donāt know.
Absolutely. Valid for everything investing
Freetrade needs to launch in Europe ASAP.
The downsides of waiting until September to launch alongside crowdfunding far outweigh any positives!
Launch and then crowdfund, make those who want to invest download the app. Simple.
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They donāt have the license yetā¦
I dont know how long it will take to get the licenseā¦maybe weeks? months? years?
Well obviously, but Adam suggested in the AMA there was some sense in delaying the launch so that it happened alongside the crowdfund.
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Iāve address this previously
Sure.
Early stage is also riskier with greater chances of bankruptcy and consequent permanent loss of invested capital.
If I average 5x per investment during the rest of my life I will be happy and Iām not a VC, just an average dude. 5x is slightly better than the market average of 0.1x per annum with dividends reinvested (SP500).
Every individual have its own expected rate of return therefore individual decisions may vary. And thatās ok
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To get this thread back on track with respect to the original topic.
TRās website still does not clearly mention that they take Payment for Order Flow. We can only learn about it from a bunch of articles scattered around the web.
How is Europe a level playing field right now? The obscene valuation increase (8,8x from their Series B in April 2020) for a broker that has an opaque business model is revealing of how much money is being exchanged behind the closed curtains.
This is not even about FT but the direction the EU market is taking right now (imagine if the PFOF business model becomes dominant in the EU exploiting loopholes in the law in the years to come). How do the EU retail investors get the best execution when all the execution venues start to take PFOF? Not an expert in the brokerage industry, just an ordinary retail client. The most logical way that this works out imo in the long term is that retail clients get a worse spread on their trades to make up for the cost of PFOF.
The Techcrunch article talks about the UK launch being examined. Would be interesting to see if the the same business model will be launched in the UK.
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Yikes!
I think this funding round and valuation pretty much speaks to a dislocated market and sets off a warning klaxon or two rather than necessarily setting a valuation benchmark for Freetrade.
Iām sure thereāll be performance hurdles for drawdown, but $900m is a formidable wall of capital to come at the sector and wider competition.
I do take some comfort when I consider what FT has achieved to date through the various funding rounds, but I think itās going to be pretty key to carve out and hard sell why FT is better for customers than Trade Republic as they take Europe. I think @szb is right to point out the concerns around the opacity of TRās model and the implications for clients - is that enough though?
The ESMA has already made a nod to the fact that it intends to look further into the neo-broker space, which includes taking a deeper look at the operating model.
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Have you seen this? European Commission - Have your say
ESMA is doing a thematic review āEU strategy for retail investorsā where PFOF is being addressed, and they are inviting views from the public. Iām sure they would welcome our communityās thoughts on retail investing.
I was tipped off by Yorick (BUX CEO) on the consultation. The Dutch regulator is firmly against the practice and obviously the German regulator is allowing it, will be interesting too see where ESMA lands.
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Done, thanks Adam 
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I have now! Thanks! I will add my deux centimes over the weekend.
Just a thought: is it also worth sharing on the country specific threads / newsletters?
I feel mostly inept to answer the vast majority of the questions.
I feel the target audience of the questionnaire itās not the retail investor. Iām not saying it should nor Iām saying it shouldnāt.
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@adam you must be pleased with this outcome?
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Worth reading the statement and release in full, but for anyone who cba.
ESMA is of the view that, in most cases, it is unlikely that the receipt of PFOF by firms from third parties would be compatible with MiFID II. In addition, ESMA also addresses specific concerns regarding certain practices by zero-commission brokers.
ā¦
ESMA is telling firms that they must thoroughly assess whether, by receiving PFOF, they are able to comply with relevant MiFID II requirements, most notably those on best execution, conflicts of interest, inducements and cost transparency.
ā¦
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In this context, ESMA requests National Competent Authorities (NCAs), especially in those
Member States in which PFOF has been observed, to prioritise this topic in their supervisory
activities for 2021 or early 2022.
There is a list of NCAs here: Board of Supervisors. It includes Bundesanstalt fĆ¼r Finanzdienstleistungsaufsicht (BaFin) which I mentioned in my original post. It will be interesting to see what they do in 2021 and early 2022.
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PFOF will hopefully join ranks of absurd telecom network roaming/banking fx fees/leveraged CFDs in the years to come.
Investing should be level playing field for everyone.
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Roaming charges are creeping back in due to brexit. Bloody brexitā¦
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