Freetrade’s 2022 Revenue Jumps, but Rising Costs Deepen Losses

<p>Freetrade, a London-headquartered commission-free <a href="https://www.financemagnates.com/terms/t/trading-platform/">trading platform</a>, ended 2022 with a revenue of more than £15.6 million, which was a jump of 23.8 percent. However, its losses grew substantially as the figure reached £39.7 million, compared to the <a href="https://www.financemagnates.com/forex/brokers/freetrade-ends-fy21-with-a-647-revenue-jump-clients-crossed-1-million/">previous year’s loss</a> of £17.1 million.
</p><p>Rising Operational Expense at Freetrade
</p><p>“The Group’s loss for the financial year… is attributed to an increased level of costs in the financial year,” the Companies House filing stated. Indeed, its sales cost jumped to £2.2 million from £1.6 million and ‘other operating expenses’ to £55.7 million from £29.27 million.
</p><p>“The most significant increase was in staff cost,” the filing added. The total headcount of the company reached over 300 employees by March 2022. However, it slashed the workforce significantly, which came down to 184 at the end of September 2022.
</p><p>Other than cutting costs, <a href="https://www.financemagnates.com/tag/freetrade/">Freetrade </a>raised a significant amount of funds last year. It secured £8 million in a <a href="https://www.financemagnates.com/forex/trading-platform-freetrade-raises-over-1m-starts-new-crowdfunding/">crowdfunding </a>round from 6,869 UK and European investors. Two institutional shareholders of the company pumped £29.3 million in a convertible loan note.
</p><p>Strong Metrics
</p><p>Known as the ‘Robinhood’ in the UK and Europe for its commission-free business model, Freetrade offers execution-only <a href="https://www.financemagnates.com/terms/r/retail-trading/">retail trading</a>, listing stocks in the UK, US, and Europe exchanges.
</p><p>The number of registered users on the platform jumped 51 percent last year, reaching more than 1.33 million from 886,743 at the end of the previous year. “This growth reflects the impact of a strategic investment in marketing activity with our first large-scale out-of-home marketing campaign as well as continued investment in our highly efficient ‘free share’ referral scheme,” the company added.
</p><p>The company’s new operational license in Sweden allowed it to onboard new customers. Now, it is planning to expand further in Europe.
</p><p>The rise in new users further contributed to the trading activities. The platform witnessed net new funding of £598.4 million, compared to £552.4 million in 2021, over an opening of £897.5 million. Furthermore, the overall trading volume on the platform jumped 9 percent to £3.6 billion.
</p><p>The firm highlighted that the trading demand increased despite the global market indicators decreasing last year.
</p><p>“Looking ahead to the next financial year, we continue towards our mission to get everyone investing… Teams remain dedicated to developing new features and products for the UK and European countries that will further enhance Freetrade’s value proposition and add potential revenue streams in a competitive market,” the filing added.
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This article was written by Arnab Shome at www.financemagnates.com.