How Does Freetrade Make Money?

Freetrade is a FinTech business that enables customers to purchase and sell stocks, ETFs, trusts, SPACs, and REITs. Only mobile applications for Android and iOS smartphones can access the trading platform. On Freetrade, users can buy and sell over 4,000 equities, 200 ETFs, 160 REIT shares, and 140 investment trusts. Let us know ‘How Does Freetrade Make Money?’.

How Does Freetrade Make Money?

With three distinct monthly subscriptions—Freetrade ISA, Freetrade SIPP, and Freetrade Plus—users of Freetrade can pay for extra capabilities. This business strategy is known as freemium. Aside from the interest, it receives on the money it lends to other organizations, Freetrade also earns money by charging currency conversion fees. Its average value in the UK is 1.3208% and is also referred to as net interest margin.

How Does Freetrade Make Money?

Freetrade also provides personal savings accounts in addition to its investing account (ISA). By gradually lowering the capital gains tax rate these accounts, which are popular in the UK, promote long-term investment.

Freetrade has also produced a tax-efficient future pension account (SIPP), which offers users additional tax breaks on salary payments. Users of Freetrade can also access a vast knowledge resource that covers all aspects of financial securities and is provided by Freetrade. The Financial Services Compensation Scheme (FSCS) will cover up to £85,000 ($118,000) in assets held by Freetrade if the company should ever go out of business.

Before founding the company, each of the four founders had a significant corporate background. For instance, CEO Dodds worked for KPMG for six years as a financial manager

Mohamed, on the other hand, has nearly 20 years of experience working at various London-area financial firms. Finally, Nebehaj had worked at Google almost for 7 years and had previously held several managerial positions at start-up companies before going it alone. Legacy brokerages, meanwhile, were still operating in the 20th century. Many of them were charging as much as £12 to execute a single trade, including Hargreaves Lansdown.

Additionally, American-based Robinhood was providing them with a flawless blueprint on how to upend the internet trading market as a fledgling firm. Interestingly, the team decided to take their proposal to the public rather than seek funding from institutional investors (such as a venture capital firm). All of these acted as leverages to freetrade’s money making strategy.

The team’s inaugural crowdfunding campaign, which was run on Crowdcude, had a target goal of £100,000 but ended up raising $169,980 instead.They were able to produce the first beta version of the product and add nearly 5,000 people to their waiting list thanks to the funding, which also enabled them to get the required FCA permission.

But 2020 got off to a less promising start. Several studies emphasized a “culture of terror” that the firm’s leadership appeared to have fostered. As a result, Freetrade saw a worker turnover rate of up to 50%. Despite the substantial change, 2020 turned out to be a very prosperous year. The coronavirus outbreak caused lockdown order checks, which encouraged thousands of (mostly young) people to try out stock trading for the first time.

How does freetrade generate revenue?

A subscription service offers, currency conversion charges, and interest on the funds in users’ accounts are all ways that Freetrade generates revenue. Since practically all of its features are free to use, Freetrade effectively follows a freemium business model. Users can choose a premium subscription if they desire a more sophisticated experience.


The majority of Freet rade’s income is derived from the subscription fee charges that users make to unlock premium accounts. Users that have these premium accounts are entitled to a number several, such as:

  • top-notch client care
  • limits on orders
  • Stop losses

3% interest on capital (more on that later), access to more stocks, and a carefully chosen selection of them and plan, ty of others. For access to a Stocks & Shares ISA account, users must pay £3 per month or £9.99 for a SIPP account.

Users are encouraged to utilize the form more frequently via monthly fees. Further cross-selling opportunities may result from this in the future. A similar strategy has been implemented by other FinTech businesses like Dave, Revolut, and Acorns.

Premium access to content

Three types of monthly subscriptions make up the majority of the business’s income:

Freetrade Securities and Shares A simple general investing account that allows free transactions & fraction profitability ratios is the ISA (£3/month). Users pay a fee to gain access to an ISA (individual savings account), which exempts the first £20,000 of assets from income and capital gains taxes.

Self-invested personal pension plan, Freetrade SIPP (£9.99/month), offers free transactions and also no share dealing fees. Once a customer attains the age of 55, SIPP assets are limited to being accessed.

Freetrade Plus (£9.99/month) is a premium membership account with access to benefits like limit orders, stop losses, curated stock selections, and priority customer assistance. Additionally, the business offers 3% on cash deposits up to a limit of £4,000. Members of Freetrade Plus get free access to ISA accounts and can subscribe to the Freetrade SIPP for just £7 per month.

Money Interest

When they maintain their funds placed on the app, Freetrade Plus members can earn up to 3% interest per month. On a monthly basis, the interest is paid. How much is paid out is calculated by Freetrade using the user’s average monthly balance. Right now, Freetrade doesn’t just give away money. The money in those accounts is from financial entities, such as banks. The money that these entities borrow is subsequently subject to interest payments. The interest rate, which is sometimes referred to as the “Net Interest Margin,” is now fluctuating by about 3.35 percent.

Freetrade revenue, and valuation

Crunchbase shows that Freetrade has raised $84.9 million in total through 9 rounds of venture capital funding. Among many others, notable investors include Dave Bailey, L. Catterton, Crowdcude, and Daintree.VC, and Draper Esprit. After its $69 million Series B financing in March 2021, Freetrade is now valued at $366 million. Freetrade earned $1.4 million in sales in December 2020, according to a previous TechCrunch story. According to this, the company’s annualized revenue would be around $16.8 million.


Users of the Android and iOS apps from the online brokerage Freetrade can purchase and sell a variety of financial assets. In addition to charging currency conversion fees and paying interest on the funds in its users’ accounts, Freetrade also offers a monthly membership service. A freemium business model is used by the corporation.

How Does Freetrade Make Money?

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