Broker app Trade Republic valued at over $5 billion

The funding round followed a $75.5 million round last year that had already turned Trade Republic into one of the highest valued startups in Germany

Broker app Trade Republic Bank GmbH, founded by former Merrill Lynch banker Christian Hecker, has become one of Germany’s biggest fintech firms by valuation.

The Berlin-based company finished a $900 million financing round with investors including Sequoia, TCV, Thrive Capital, and Peter Thiel’s Founders Fund, it said in a statement on Thursday. The round valued Trade Republic at over $5 billion.

Trade Republic lets customers trade stocks, ETFs, crypto currencies and other financial products on its app, mostly without order commissions or other fees. Hecker told Bloomberg earlier this month the company is looking to offer its services all over Europe.

Today’s funding round followed a $75.5 million round last year that had already turned Trade Republic into one of the highest valued startups in Germany, next to smartphone bank N26.

Late last year, N26 was considering a fresh fundraising at a valuation above $3.5 billion, while early this year Berlin-based banking platform provider Mambu raised $134.59 million at a $2.1 billion valuation.

The funding is also a glimmer of success for Germany’s fintech industry, after the high-profile collapse of payment firm Wirecard.

We expect the company to break even in 2022 and achieve strong margin growth thereafter, said Marius Fuhrberg, analyst at German financial services firm M.M. Warburg.

Traditional brokers finance themselves through fees and rebates from trading venues. New challengers, like Trade Republic and Robinhood, receive revenue from “payment for order flow,” a system where market makers like Citadel Securities pay retail brokers for routing orders to them.

Don’t really box this company into one of those ready for an exit, it is a very young company that has a lot to do before thinking about anything, said Luca Bocchio, a partner at Accel who sits on Trade Republic’s board. He added that he expects Trade Republic to focus on growth over profitability.

In a way monetization, it is not yet the most important variable I would consider, he added.