British stock trading app Freetrade achieved breakeven status for the first time in the first quarter of 2024, reporting adjusted EBITDA of £100,000 and preliminary revenue of £6.7 million. This milestone marked a significant turnaround from the company’s £8.3 million loss in 2023, showing a positive trend in reducing losses and increasing revenues. CEO Adam Dodds attributed this success to defying difficult market conditions and delivering healthy growth while decreasing losses from the previous year.
The move toward profitability is welcome news for Freetrade’s equity crowdfunding investors, who have been eagerly awaiting updates on the company’s financial performance. Despite a 65% reduction in valuation to £225 million in its latest equity crowdfunding round, Freetrade’s net inflows reached £130 million in the first quarter as retail investor activity surged. Assets under administration also grew to £1.8 billion, indicating positive momentum for the company’s future growth plans, including the rollout of a new web platform.
Freetrade faces competition from U.S.-based stock trading platform Robinhood, which recently relaunched in the U.K. in an attempt to expand its market presence. Despite this competition, Dodds remains optimistic about the future, emphasizing the benefits of choice and competition for retail customers in the market. Freetrade’s first-quarter performance was driven by higher trading volumes and increased foreign exchange income, fueled in part by heightened retail investor interest in response to macroeconomic uncertainty and speculation over central bank rate cuts.
The uncertain economic environment in 2022, exacerbated by Russia’s invasion of Ukraine and higher interest rates, had a negative impact on equity markets. However, Freetrade’s strong performance in the first quarter of 2024 indicates a recovery as retail investor participation increased, particularly in crypto-correlated stocks such as Coinbase, MicroStrategy, and Marathon Digital. The rally in crypto prices also contributed to Freetrade’s growth despite the platform not offering crypto trading, highlighting the interconnectedness of financial markets and investor sentiment.
Looking ahead to the rest of 2024, Freetrade is focused on major product developments to support its next phase of growth. The company aims to leverage its strong first-quarter performance and increasing retail investor activity to build on its success and continue moving toward sustainable profitability. With a clear path towards breakeven already established, Freetrade is positioning itself for further growth and expansion in the competitive U.K. market, where multiple winners are expected to emerge to meet the diverse needs of retail investors.
