The Freetrade logo on a smartphone screen.
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British stock trading app Freetrade broke even earlier this yr, the corporate told CNBC, marking its first ever breakeven after posting full-year losses in 2023.
Freetrade reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of £100,000 ($124,863) in the primary quarter of 2024, based on unaudited financial reports shared with CNBC.
Preliminary sales for the quarter were £6.7 million.
Freetrade still made a lack of £8.3 million in 2023, in comparison with the lack of £28.8 million the yr before. Sales rose to £21.6m last yr, up 45% on 2022.
“We have defied challenging market conditions and delivered healthy growth in 2023 while dramatically reducing losses in 2022,” said Adam Dodds, CEO and founding father of Freetrade.
Equity crowdfunders rejoice
The development might be welcome news for Freetrade’s crowdfunding investors, who’ve been searching for an update on the corporate’s trajectory towards profitability following a difficult financial period.
Freetrade’s value fell 65% in its latest equity crowdfunding round on Crowdcube to £225m ($280.3m) from £650m in 2023, with the corporate citing a “different market environment” with higher blamed rates of interest and inflation.
Net inflows also totaled £130m in the primary quarter as retail investor activity increased in response to the recovery in markets last yr. Assets under management also totaled £1.8 billion.
“It is important to our crowdfunding investors that we demonstrated a clear path to breakeven in our last fundraising campaign,” Dodds said.
“As we look to the remainder of 2024, we have important product developments ahead that will support our next phase of growth as we currently prepare to launch our web platform.”
Stock markets saw sharp declines in 2022 because of macroeconomic uncertainty and better rates of interest triggered by Russia’s full-scale invasion of Ukraine, resulting in risk-off trading worldwide.
Britain’s answer to Robinhood
Freetrade is a competitor to Robinhood, the US stock trading platform. Robinhood recently relaunched within the UK in March, marking its third try to enter the European market.
Freetrade’s Dodds said he was unimpressed 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 multiple winners in the UK market, offering the full range of tax packaging and features that the local retail investor expects,” he added.
Freetrade said its first quarter performance was driven by higher trading volumes in addition to higher foreign exchange income.
Freetrade said it has seen a major increase in retail investor participation since October 2023 amid speculation about when and the way often the Federal Reserve and other central banks will cut rates of interest this yr.
A rally in crypto prices also helped Freetrade in the primary quarter. Although the platform doesn’t offer crypto trading, Freetrade has seen increased activity from retail investors in crypto-correlated stocks like Coinbase, MicrostrategyAnd Marathon Digital.