By Oliver Smith on Thursday 23 April 2020
Trading app looking to raise £1m+ in upcoming May funding round.
UPDATE 24-04-2020 – Freetrade's 2020 crowdfunding announcement is now live here.
Fee-free share trading platform Freetrade is heading back to Crowdcube for its, wait for it, *sixth* crowdfunding round next month.
AltFi can exclusively reveal that the startup’s annual tradition of opening up its own equity to retail investors will continue in 2020, despite coronavirus.
“We’ve been planning on doing it again this quarter since last year’s round, and you might question whether we should delay it, but why?” CEO Adam Dodds told AltFi.
“We’ve got a great growth story that our community will back, and we’ve gained a huge number of customers since the last round, so there’s all these people who didn’t know about Freetrade last time.”
Since its 2019 crowdfunding round, which became two rounds after technical difficulties with Crowdcube, Freetrade’s customer base has exploded from 25,000 customers to over 150,000—an increase of over 500 per cent.
Last year Freetrade raised £1m in 77 seconds and went on to raise over £5m across its two crowdfunding rounds, and later topped up the round to $15m (£12m) with the help of Freetrade’s first venture capital round with Draper Esprit.
This year Dodds says Freetrade will be listing its round at £1m, but will be “opening it up all the way to the limit” with scope to overfund all the way to the EU’s limit of €8m (£6.9m)
The round is scheduled for mid-May, but the Freetrade team are going to wait to announce the exact date, “just in case that’s the day the UK lockdown is lifted” Dodds laughs.
Similar to previous crowdfunding campaigns, previous investors and Freetrade customers will be given early private access.
The news is also good for Crowdcube, the platform Dodds says he will be using again, despite last year's issues, as Freetrade accounted for nearly 40 per cent of the crowdfunding site's funds raised in Q3 2019.
As for what the cash will be spent on, while Freetrade expanded to Ireland and the Netherlands at the start of the year, with waiting lists open in France and Germany, but Dodds says further European expansion is “definitely not our first priority right now” given the circumstances and will have to wait until the second half of 2020.
Instead, the CEO says it’ll allow a stronger rollout of features in the coming months with “more of a marketing push” to boot.
European expansion will have to wait for Freetrade’s larger Series B, which Dodds says is already being worked on and teases is due “later in the year or early in 2021”.
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