Freetrade, the British fintech startup that is developing a mobile application for commission-free stock trading, announced it has reached 172% of its funding target on the crowdfunding site Crowdcube.
The initial goal was to raise £100 000 in two weeks, but in the end Freetrade got £172 850 from 150 investors. In the first week of its fundraising campaign Freetrade got 47% of the target sum from 52 investors, reached the target in 10 days and remained open for investment until the two-week term expired.
The idea of the Freetrade application is to allow ordinary people invest in stock without having to go through investment intermediaries and pay hefty share dealing commissions. The application will also offer professional advice from independent financial advisors, without the need for a massive investment upfront. There will also be fractional share dealing, which means that one can invest just a portion of the price of a share. For example, if a single Apple share costs $100, an individual investor can put in $20.
The application will be based on the freemium model – users will pay only for premium services and the company will collect a 10% commission on the sum the investor pays to the financial advisor – much like the Airbnb and Uber platforms.
Freetrade cofounders Davide Fioranelli and Adam Dodds say they already have the core product developed and would use the funding to complete the product and launch it by the end of this year. The plan is that the application will start generating revenue within 12 months from its launch.
According to Fioranelli, Freetrade already has 500+ clients on its waiting list who wish to try the platform.
Furthermore, Freetrade is in the process of applying with the FCA for an execution-only broker and is member of FCA Innovation Hub program.