Freetrade Posts Losses In 2022 Despite A Revenue Growth

Freetrade, a commission-free trading platform whose headquarters are in London, has reported revenues of more than £15.6 million in the financial year that ended in 2022. Despite the growth in revenues, the losses reported by the company increased significantly to reach £39.7 million.

Freetrade posts a  £39.7M loss in 2022

The £39.7 million worth of revenues posted by the company during the period was significantly higher than the loss of £17.1 million that was posted during the previous year. In the financial report, the company attributed the increase in losses to increased costs during the financial year.

The results show that the sales costs increased from £1.6 million during the previous year to £2.2 million. “Other operating expenses” also increased from £29.27 million to £55.7 million. The filing added that the most significant increase by the company was in staff cost.

There was also an increase in the total number of employees at the headcount, with the headcount reaching more than 300 employees by March 2022. However, the company slashed the number of employees significantly, with the same dropping to 184 by the end of September 2022.

Besides cutting costs, Freetrade also announced that it raised a significant amount of funds during the year. The company raised £8 million in a crowdfunding round. The funding round attracted a total of 6,869 investors in the UK and Europe. Two institutional shareholders also raised £29.3 million through a convertible loan note.

Freetrade reported some growth metrics

Despite the significant loss reported by the company, other metrics pointed toward growth. The platform has become increasingly popular across the UK and Europe because of providing commission-free trading.

Freetrade allows users to access execution-only retail trading for stocks listed across Europe, the UK, and the US. Last year, the company reported that the number of registered users had increased by 51% to surpass 1.33 million users compared to the 886,743 reported during the previous year.

The company has also said that the growth in the number of users reflected the effects of strategic investment across marketing through a massive marketing campaign. The company has also been investing in a “free share” referral program that has also increased the costs.

Freetrade secured a new operational license in Sweden that enabled it to attract new customers in the country. It is now planning for further expansion into Europe. Besides the growth in the number of users, there was also a growth in other areas,

The net new funding at the company last year came in at £598.4 million from the £552.4 million that was reported in 2021. The overall trading volumes also increased by 9% to reach £3.6 billion. The firm also noted that there was an increase in trading demand during the year.

The company said that its objective for the current financial year was to boost access to investment. The company would achieve this by creating new features and products for the UK and European countries to boost the Freetrade value proposition and generate more revenue streams within a competitive market.