The goal is “the democratization of wealth”: nothing to do with those who want to steal from the rich to give to the poor. But the idea behind Trade Republic is to solve that “pension gap” between future retirement and salary levels that, especially in Europe, forces people to integrate it with private investments. «Capital markets are today the main source for generating wealth in the medium to long term. The idea we started from is that we need to offer people a simple and flexible way to access these markets ”, explains Christian Hecker, CEO and cofounder of the German startup based in Berlin.
Trade Republic closed a $ 900 million funding round at the end of May, led by venture capital giant Sequoia, along with Tcv and Thrive Capital, with a valuation that has risen to five billion dollars making it one of the private fintechs highest growth in Europe. With these funds, the startup, which now has 1.1 million active users in Germany, Austria and France, is now heading towards Italy, where it aims to land by the end of the year: “For us it is a crucial market for development, a long-term investment where you can make inroads with consumers with a profiled and agile offer that breaks through a market characterized by high costs and low quality », says Hecker.
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Like other trading initiatives, Trade Republic offers a commission-free investment service on a fleet of over 8,000 international shares, 1,500 ETFs and four cryptocurrencies, with an operational speed that allows you to open a saving account in ten minutes and buy shares with less than three taps on the mobile screen: «We aim to be an investment and savings platform, not a trading app. This is why we favor a long-term, non-speculative logic. Our clients, who for more than half have never made an investment, for 80% invest in ETFs rather than single shares ».
In this logic, the investment in a saving account, a monthly savings plan, is at zero commissions, while the purchases of individual securities are charged with a fee of one euro per transaction: “We do not do consultancy, but the thrust with which we educate customers is to invest for their future, in a long-term logic and with a strong diversification of the portfolio “, adds 31-year-old Hecker, who founded the company together with Thomas Pischke and the Italian Marco Cancellieri, head of the mobile app .
To date, Trade Repubblic, backed by a German banking license, has achieved assets under management of six billion dollars, which means an average of just under 6 thousand dollars per user. “Even with the launch in Italy we aim to reach a potential audience of millions of people to whom we can offer convenient and efficient investment services compared to those offered by traditional banks”. If everything is free, what does the startup that calls itself neo-broker earn from? “When it does not earn from commissions – explains the CEO -, a broker generates revenues from the discounts guaranteed by the platforms to grab the execution of orders, which take advantage of greater liquidity and Trade Republic guarantees its customers the best price without earning on the spread “