No-Fee Broker Freetrade Raises £50 Million Led by US Investor

Freetrade, the UK commission-free stock trading platform, has closed on £50 million in its most recent funding round, Sky News reports.

The new investment was led by Left Lane Capital, a New York-based venture capital and early growth equity firm, focused on internet businesses, along with Bernard Arnault-backed private equity firm, L Catterton.

The round includes £35 million in new shares, and roughly £15 was injected from sales of existing Freetrade investors.

The funding will be used by Freetrade for further growth and product development, including doubling down on expanding into new markets. The firm, which claims more than 600,000 customers, has used the Crowdcube platform many times to open its equity up to retail investors and raise fresh capital.

In 2020, London-based start-up made a record-breaking crowdfund in which it secured £1 million in just 77 seconds, also on Crowdcube. This then got a significant top up after Freetrade raised a total of £5 million across two further crowdfunding rounds which were notably in the firm’s very first crowdfunding attempt back in 2016.

In 2019, they raised $15 million, including a Series A led by venture capital firm, Draper Esprit.

Rather than partnering with an established broker, Freetrade holds a ‘full scope firm’ license from the FCA.

No-Fee Competition Heats up in the UK

Freetrade, which calls itself a challenger stockbroker, has rebuilt its platform infrastructure for investing to allow traders to place their instant orders without having to pay a commission fee. Before that, clients were allowed to invest in stocks and ETFs, but only if they accept to execute their trades at the end of business day, otherwise the broker charges £1 per trade.

Freetrade’s app offers commission-free stock investment and is targeted mainly at millennials. The company has recently accelerated both new investments and product range, including the introduction of fractional shares.

(Photo: FreeTrade)

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