British stock trading app Freetrade achieved breakeven in the first quarter of 2024, marking its first move into profitability after reporting losses in 2023. The company reported adjusted EBITDA of £100,000 and revenue of £6.7 million in the quarter. Despite generating a loss of £8.3 million in 2023, down from £28.8 million the year before, Freetrade saw an increase in revenues to £21.6 million, up 45% from 2022. CEO Adam Dodds attributed the company’s growth and reduced losses to defying difficult market conditions.
This news will be welcomed by Freetrade’s crowdfunding investors, who have been eager for updates on the company’s path to profitability after a challenging financial period. Freetrade’s valuation dropped by 65% to £225 million from £650 million in 2023 due to market factors such as higher interest rates and inflation. Net inflows totalled £130 million in the first quarter, with assets under administration reaching £1.8 billion. Dodds emphasized that the company is on track to achieve breakeven as outlined during the previous fundraising round, with plans for major product developments and the rollout of a web platform in 2024.
The stock market experienced significant fluctuations in 2022 due to macroeconomic uncertainty and higher interest rates influenced by events like Russia’s invasion of Ukraine. Freetrade, a competitor to the U.S.-based Robinhood, saw an increase in retail investor activity in response to resurgent markets. Despite Robinhood’s relaunch in the U.K. in March, Dodds remains optimistic about the competition, believing that more choices benefit retail customers. Freetrade’s performance in the first quarter was driven by higher trading volumes and increased foreign exchange income.
Since October 2023, Freetrade has observed a surge in retail investor participation, fueled by speculation regarding interest rate cuts by central banks. Additionally, a rally in crypto prices positively impacted Freetrade’s performance in the first quarter, despite the platform not offering crypto trading. Increased retail investor activity in crypto-related stocks like Coinbase, MicroStrategy, and Marathon Digital contributed to Freetrade’s growth. The company is focused on continuing its growth trajectory through major product developments and the upcoming launch of their web platform.
Overall, Freetrade’s achievement of breakeven in the first quarter of 2024 represents a significant milestone for the company and its investors. Despite challenges in the market, Freetrade has managed to reduce losses and increase revenues, positioning itself for further growth in the future. With plans for new product offerings and the rollout of a web platform, Freetrade is poised to capitalize on the increasing retail investor activity and market opportunities in 2024. This success showcases the resilience and adaptability of Freetrade in navigating the complexities of the stock trading landscape.
