Trade
Republic closed a €1.2 billion secondary transaction valuing the company at
€12.5 billion, cementing its position as Germany’s most valuable startup.
Existing
investors, led by Peter Thiel’s Founders Fund, bought shares from early backers, while new long-term investors, including Wellington Management, Singapore’s GIC, and Fidelity Management & Research Company, joined the shareholder base.
Trade Republic’s Valuation
Jumps From €5 Billion in Three Years
The deal
doesn’t inject fresh capital into the company, which has been profitable for
three consecutive years. Trade Republic had revenue of €340 million in the year
to September 2024. The Berlin-based neobroker reported earlier this month
it generated
€34.8 million in profit after securing its full ECB banking license, with equity climbing
to €566.5 million.
The
secondary round more than doubles Trade Republic’s 2022 valuation of roughly €5
billion. Other existing investors participating in the share purchase include
Sequoia, Accel, TCV, and Thrive Capital, alongside new investors Khosla
Ventures, Lingotto Innovation, and Aglaé, the technology investment arm of
France’s Arnault family.
Trade
Republic has
doubled its customer base to more than 10 million users in the past 18
months, with clients now managing €150 billion in assets across the platform.
Co-founder Christian Hecker said 70% of Trade Republic customers are first-time
investors, adding that the “cultural shift to retail investing in Europe
is only starting”.
“We launched in 2019 with a mission to help close
Europe’s pension gap,” he added.
Expansion Follows Banking
License and Product Rollout
The company
obtained a full banking license from the European Central Bank in 2023,
allowing it to expand beyond its original brokerage model. Trade Republic now
offers current accounts with local IBANs, passes ECB interest rates directly to
customers, and has distributed €2.5 billion in interest payments since January
2023.
This year
the neobroker localized its offering in France, Italy, Spain, the Netherlands,
and Austria, while launching in
Poland in
September. The company also introduced child savings accounts and expanded into
new asset classes, recently giving retail
investors access to private markets, fixed income, and a crypto wallet.
Pension Gap Drives Retail
Investing Surge
Hecker
pointed to Europe’s
widening pension gap as a driver for private wealth accumulation.
“This
is more important than ever as the public pension system is under growing
pressure to fulfill its promises,” he said.
Recent
surveys show 41% of Europeans still don’t contribute to supplementary pension
schemes, while state pensions across the EU are expected to decline from 46.2%
of retirement income in 2019 to around 37.5% by 2070.
Germany and
other European governments have started implementing pension reforms to
encourage private stock ownership, a trend Trade Republic expects to
accelerate. The company, which launched in 2019, operates across 18 European
countries and holds a full banking license supervised by Germany’s Federal
Financial Supervisory Authority (BaFin) and the Deutsche Bundesbank.
This article was written by Damian Chmiel at www.financemagnates.com.
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