British-based stock trading app Freetrade achieved break-even earlier this year, marking its first-ever move into profitability after incurring full-year losses in 2023, according to a report by CNBC.
Freetrade reported adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) of £100,000 ($124,863) in the first quarter of 2024, according to unaudited financial statements.
In 2023, Freetrade still experienced a loss of £8.3 million, a significant decrease from the £28.8 million loss recorded the previous year. Revenues rose to £21.6 million last year, representing a 45% increase from 2022.
“We defied difficult market conditions and delivered healthy growth in 2023 while dramatically reducing losses” in 2022, said Adam Dodds, CEO and founder of Freetrade.
Crowdfunding Investors Rejoice
Equity crowdfunders are likely to be pleased with this development. The company’s move toward profitability comes after a challenging financial period.
Freetrade’s valuation saw a 65% reduction to £225 million ($280.3 million) from £650 million in 2023 in its latest equity crowdfunding round on Crowdcube. The company attributed this decline to a “different market environment” characterized by higher interest rates and inflation.
In the first quarter, net inflows amounted to £130 million, reflecting growing retail investor activity in response to resurgent markets last year. Assets under administration also reached £1.8 billion.
Freetrade, often dubbed Britain’s answer to Robinhood, competes with the U.S.-based stock trading platform. Robinhood recently relaunched in the U.K. in March, marking its third attempt to penetrate the European market.
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Freetrade attributed its strong first-quarter performance to increased trading volumes and higher foreign exchange income.
Since October 2023, the platform has observed a notable surge in retail investor participation, fueled by speculation about rate cuts by the U.S. Federal Reserve and other central banks this year.
