A zero-fee investment app, which the company claims to be the UK's first, has secured £3.1m in funding to pump into growing its business.
Freetrade, which provides users with free stock trading, generated the funds following one of the most successful crowdfunding campaigns ever on Crowdcube.
According to the London-based start-up, it beat its £500,000 target in just 12 minutes.
It then hit overfunding territory raising £1m in 28 minutes, £2.6m in 24 hours and closed the round at £3.1m in just 28 hours as Crowdcube’s most overfunded equity offering ever.
The funds will be used by Freetrade to support its next phase of rapid growth by enhancing its customer operations, product and engineering teams, as well as expanding into EU markets, and cryptocurrency trading.
Adam Dodds, chief executive and founder of Freetrade, said: “The fact that we could have raised even more, but decided to close the round as we didn’t want to dilute the equity is truly phenomenal.
“The hype surrounding this funding round also highlights the appetite there is for a commission-free investment app in the UK.
"We plan to revolutionise the investing space for those who have previously been restricted by artificial barriers like minimum account sizes, high commissions and overly complicated products - especially millennials.”
News of support for the app was broadly welcomed by financial advisers as a useful addition to financial services, though some raised concerns.
AJ Somal, chartered financial planner at Birmingham-based Aurora Financial Planning, said it will be interesting to see how the company develops.
He added: “Advancements in technology with disruptive consequences for existing traditional stockbrokers are here to stay. Young people who know what they want, would like to do it as efficiently and at low cost as possible, so this innovation is not a surprise and nor is the record funding for this venture.”
Mel Kenny, chartered financial planner, for London-based Radcliffe & Newlands, raised concerns with the concept.
He said: “High costs of entry for smaller investors has often been cited so the app will appeal to many but it will also open the door wider for novices to make some poor decisions with their money, whether it be investing in fads or succumbing to behavioural bias.”
A similar warning was echoed by Scott Gallacher, chartered financial planner at Leicester-based Rowley Turton, who said: “I can see this app being attractive to those for whom investment is a hobby to be enjoyed but I’d be cautious about its mainstream appeal.
“The main issue people face is not a barrier to saving or investment, or charges, but a combination of apathy and bewilderment. I’m not sure this app will address either of these issues.
“Technology will really revolutionise investment when its truly incorporated financial planning at it’s core, for example, when we can ask Alexa how much we should be saving for our retirement and whether or not we are on track.”
