Robinhood is one of the few hyped startup ideas from Silicon Valley that has not yet made it to Europe with a well-known imitator. Countless German founders like to be inspired by US business models – HelloFresh and Zalando are just some of the best known examples.
The Berlin startup Trade Republic Bank wants to try it now but with the Robinhood model in Germany. The idea: to make stock trading free of charge – and especially to inspire a young target group with a trading app.
The model from the US, founded in 2013, has collected several million users and half a billion in investor funds. Trade Republic is still at the beginning, as of today Wednesday, the waiting list is open, in February it should start.
Fintech claims to have a sub-license for securities trading, and Solarisbank manages client funds as a partner. Like the US model, there are no commissions for trading in equities and ETFs, but “an outside cost allowance” of one euro per trade is charged. For equities, this is between 5 and 10 euros for other online brokers.
Before the market launch, Trade Republic itself has collected a total of six million euros from lenders, but also made the majority of the strategic investor Sino AG. The Düsseldorf-based company is a trading platform that should help with the development of the Fintechs. Founder Christian Hecker assumes that there may still be other donors in the future.
An unusual process, as Sino AG already holds a majority stake in the company. But it needs the experienced partner for this development phase, says Hecker.
The Berlin company also wants to earn money through a small fee it receives from the trading platforms for each trade. The lie in a trade with 100 euros in the low cent range, said the founder. Automation could keep operating costs low. At the moment, 25 employees are working for the Fintech, but with the market launch the team is expected to continue to grow. For the model to pay off, many customers are needed.
Robinhood has also relied on massive customer growth in recent years. Recently, the founders gambled as they wanted to offer a savings account with three percent interest. But an authority forbade them.
Now, according to reports, they dare to take the step to Europe and start in the UK. So it could be for Trade Republic shortly after the start also competition from the model. Nothing is known yet about Robinhood’s plans for a Germany expansion.
Also published on Medium.