Freetrade logo on smartphone screen.
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British stock trading app Freetrade broke even earlier this year, marking its first-ever move into the black after posting full-year losses in 2023, the company told CNBC.
Freetrade reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of £100,000 ($124,863) in the first quarter of 2024, according to unaudited financial statements shared with CNBC.
Pro forma revenue was £6.7 million in the quarter.
Free Trade still makes a loss of £8.3m in 2023, down from the £28.8m loss it made the previous year. Revenues rose to £21.6m last year, up 45% on 2022.
“We defied difficult market conditions and delivered healthy growth in 2023 while significantly reducing losses” in 2022, said Adam Dodds, CEO and founder of Freetrade.
Equity crowdfunding rejoices
This development will come as welcome news to Freetrade's crowdfunding investors, who have been looking for an update on the company's move towards profitability after a difficult financial period.
Freetrade saw its value fall 65% to £225 million ($280.3 million) from £650 million in 2023 in its latest equity crowdfunding round on Crowdcube, with the company blaming a “different market environment” for its high prices. Interest and inflation. .
Net flows totaled £130m in the first quarter as well, with retail investor activity growing in response to renewed markets last year. Assets under management also reached £1.8 billion.
“Importantly for our crowdfunding investors, we established a clear path to breaking even during our most recent fundraising,” Dodds said.
“As we look to the rest of 2024, we have significant product developments that will support our next phase of growth with preparations underway to roll out our web platform.”
Stock markets saw serious declines in 2022 as a result of macroeconomic uncertainty and rising interest rates fueled by Russia's full invasion of Ukraine, which led to risk-off trading around the world.
Britain's answer to Robinhood
Freetrade is a competitor to Robinhood, the US stock trading platform. Robinhood recently relaunched in the UK in March, in its third attempt to crack the European market.
Freetrade's Dodds said he was undeterred by Robinhood's return to the UK, telling CNBC via email that “more choice and competition is good for retail customers.”
“Ultimately, there will be many winners in the UK market, offering the full range of tax envelopes and features that local retail investors have come to expect,” he added.
Freetrade said its first-quarter performance was driven by higher trading volumes as well as higher foreign exchange income.
Since October 2023, Freetrade said it has seen a notable increase in retail investor participation amid speculation about when and how many times the US Federal Reserve and other central banks will cut interest rates this year.
The rise in cryptocurrency prices also helped Freetrade in the first quarter. Although the platform does not offer cryptocurrency trading, Freetrade has seen an increase in retail investor activity in cryptocurrency-related stocks such as Coinbase, Accurate strategyAnd Digital Marathon.
