Online broker Trade Republic holds another round of funding
Online broker Trade Republic from Germany conducted a round of financing, which attracted 250 million euros. Trade Republic plans to use the funds to develop its business. In 2021, the company managed to get 900 million dollars, the main investor was the Sequoia Foundation. At that time, the startup was valued at $5 billion.
The broker has been operating since 2015, at that time it was known as Neon Trading. The startup emerged in a business incubator from Comdirect Bank, its founders were three young people – a physicist, a philosopher, and a programmer. In 2017, the company received an investment from Sino in exchange for a large share of stock. Trade Republic grew aggressively and other investors took notice of it, including well-known venture capital funds such as Project A Ventures, Founders Fund. Between 2019 and 2020, the broker received €60 million in investments. Around that time, Sino sold its stake, thus ceasing to be the majority holder of the securities.
In 2019, Trade Republic expanded the functionality of its application by providing the ability to trade stocks. This made the service extremely popular and by 2020 the number of Trade Republic users was 150 thousand people. According to the startup’s own analysis, more than 30% of this number of clients had never conducted transactions with securities or invested in ETFs before. The main audience of the app was men in their 30s.
Trade Republic entered the Austrian market in 2020, and a year later its service became available in France and Spain. By the beginning of 2021, the number of clients exceeded 600 thousand and the company managed assets of 4 billion euros. 80% of app users preferred to make a savings plan, in stocks or ETFs.
In early 2021, Trade Republic was involved in a scandal involving a sharp rush by private investors to buy GameStop stock. On the afternoon of January 28, 2021, the broker suspended the ability to buy these securities and a number of other businesses. Trade Republic justified its decision by unforeseen circumstances in the market, but this explanation did not satisfy its customers. The users of the company submitted more than 4 thousand complaints to the financial monitoring service.
However, Trade Republic has managed to settle the problems and the scandal has not considerably affected the activity of the broker. Already in May of the same year 2021, the company held a successful round of financing, and the valuation of the startup increased.
In 2023 Trade Republic is valued at 5 billion euros.