Co-founder of Freetrade.io: Brexit will affect European and British startups
Free exchange is a challenger stock broker which works to change the way users access stock transactions and the wider financial market. By offering a number of freemium services, the company offers solutions that allow everyone to have easy, accessible and affordable shareholding.
In a recent interview with LearnBonds, the co-founder and CMO of stock market startup Freetrade, Viktor Nebehaj, shared his take on the company’s future and explained how Brexit is affecting their operations.
1. How was 2019 for free trade? What have been your main achievements this year?
“2019 has been our most successful year to date. Over the past year we have grown from eight to over 50 employees, amassed over 60,000 clients, our growth accelerates and raised over £ 6million through crowdfunding, including £ 1million. in 77 Seconds – Crowdcube’s Fastest £ 1 Million Raise!
From a product perspective, we have removed the waitlist and launched the Android app making the product officially available in the UK. We have expanded our equity universe to over 575 stocks, ETFs and trusts, including UK and US securities, and we are preparing to add several thousand more. We’ve also added Apple and Google Pay to simplify top-ups and rolled out ISA transfers. “
2. Will Brexit affect your business? Do you think this will hurt the future of London-based tech startups?
“It started to affect our business since the referendum. Even before Adam (Dodds, CEO) founded the company, he planned to expand across Europe. While we have built Freetrade, contrary to the attitude of several other fintech startups, our view has been that regulators are not an obstacle to be thwarted, but an opportunity that we seize. Our mission will only progress if we build trust, and they are an integral part of it. We have been authorized and regulated by the FCA since 2017, and we just received additional authorizations from the FCA in July of this year. So this is something we take seriously.
Although we have had our passport rights for years, Brexit has made their future uncertain. We had to come up with a plan and we took steps to make sure we didn’t have to delay our European expansion. It costs time and money.
Another aspect of Brexit is its impact on hiring. The UK brand has changed and EU applicants who would gladly have moved here might choose Berlin, Amsterdam or even Dublin now.
In my opinion, Brexit will absolutely have an impact on London-based tech startups, and with the bulk of it in front of us, the current feeling might be that it won’t be that bad and we will continue to thrive. This flies in the face of the logic of what’s going to happen, as we would have less access to talent and one of the world’s largest consumer markets, comprising well over 100 million millennials. We’re not going anywhere, but our strategy had to be adjusted.
From a personal point of view, the EU gave me the opportunity to move to Dublin and join Google in 2005 easily. I grew up in a poor area of Eastern Europe where auto manufacturing has helped our community survive, so some of the news I read is quite heartbreaking.
3. Why did you decide to use crowdfunding to increase your investments compared to traditional angel investors? Would you recommend this strategy to others?
“At the beginning, we had the idea that the users of crowdfunding platforms are already investors, and many of them would understand our product straight away. These same users could also be your current and future users, so a similar logic could apply to many other consumer startups, as long as you have a product / market fit, so in that sense I would recommend at least exploring the strategy for these companies.
Our first round in 2016 resulted in 140 original investors, which was the seed of a waiting list that grew to nearly 100,000 members, as word spread. I was the very first investor in this round to invest a significant amount, and ended up joining Adam as a growth manager and co-founder at the time because I was so impressed with his vision and I wanted to help him achieve it.
Since then we have raised over £ 10million from members of our community, and every time we crowdfund we gain new advocates and clients. Our community has greatly contributed to our success. They have been our biggest champions and continually push us to create the right features and improve the product.
Thus, crowdfunding has benefited us in more than one way. Lots of other startups are asking for advice, and we’re happy to give it. Crowdfunding is aligned with our mission to make investing accessible and to help ordinary people benefit from the economic and financial growth from which they are currently excluded.
4. There seems to be a race to offer free stock trades between challenger banks, CFDs and traditional US stock brokers. Who do you see being victorious and why?
“I see Freetrade being victorious by becoming the most important and most reliable product in Europe and beyond. Of course, we have a lot to build to get there, but I personally see myself structured the best to get there.
Traditional U.S. stock brokers will find it more difficult to implement and operate the commission-free model. As an exclusively mobile startup, the technology allows us to achieve huge savings and a different cost structure. That said, expectations have changed for good. Incumbents have no choice and must implement zero fees to successfully acquire millennial customers, including in the UK. We have already seen explosive demand for our product, but no one has a monopoly on commission-free stock trading.
In a future world of many toll-free providers, trust, transparency (especially in Europe) and technology (the three T’s as we call them internally) will be the differentiators. Incumbents can’t take any of these factors for granted when it comes to millennials.
The same goes for British holders. The pressure is on, Millennials hear about scandals, outrageous fees that pay to roam islands in the Mediterranean, and their expectations are radically different when it comes to these three T’s above.
In my opinion, CFD providers will increasingly suffer from a trust deficit. And the challenger banks have to focus on the core, otherwise, they cannot create sufficiently in-depth banking products. Investing isn’t something you just slap on.
That said, we have a long way to go to move forward, and it’s not a winner who takes the entire market.
5. What is your opinion on cryptocurrencies? Do you plan to add them to your platforms as Robinhood and Revolut did?
“It’s interesting that when the price of Bitcoin goes up, we get a lot of emails asking us to add crypto, but those requests disappear overnight when the rally ends.
For a while we explored the idea of adding cryptocurrencies to the app, but we came to the idea that it wouldn’t be in the best interest. of our users, because crypto can be extremely volatile.
We want to help our users develop positive habits that encourage people to think about their long-term savings rather than get rich quick diagrams.
6. What are the 3 most important lessons you have learned since starting the business where it is??
“First of all, your business needs to have a product / market fit from the start. This is essential if you want to build a high growth startup and have continuous and sustainable user growth. And you have to double down, once you have that. The growing user base is expected to transform into a community that loves and embraces the product and holds the team accountable for product features and improvements. It’s a real ditch. Always double down on the good things and be intense about them.
Another, when you start a startup it continually sheds its skin and turns into something that isn’t for everyone. It seems to me that it was yesterday that our entire company was sitting around a relatively small Korean fondue table next to our first office. But not everyone from the first team stays for the whole trip. If the startup moves, its culture evolves towards a more successful culture that is not suitable for everyone.
The third is related. It’s never too early to start working on your crop. People have incredibly different attitudes at work, and the time to start understanding your collective approach is when you start working with your co-founder (s). For us, it was essential to understand that we need people who are courageous, resourceful and able to take full ownership of things.
7. What do you think of Facebook Libra? Do you think this will be a net benefit for Facebook users? Do you think this will change the financial banking landscape?
“I am European. A huge American company that already has so much access to our photos and communications, having access to the information that is in our transactions, is an uncomfortable idea. The tech might be cool, but I don’t see a real, meaningful issue that Facebook is trying to solve here.
The most important promise of fintech is not the technology for itself, but that behind the scenes we can relatively easily (compared to a few decades ago) create companies and products that attach great importance to transparency and the treatment of customers. fairly. I joined Freetrade to work on this and on the mission of making investing accessible and helping people enjoy the growth they are excluded from. These are issues worth solving.
Thanks Viktor for the conversation!