The licence will allow the FinTech to hold customer deposits, making it less reliant on revenue from payment for order flow.
In brief:
- Berlin-based neobroker Trade Republic has been granted a full banking licence from the European Central Bank
- Trade Republic was last valued at $5.3bn when it raised one of Germany’s biggest-ever rounds in 2021, from international VC heavyweights including Sequoia, Accel, TCV and Peter Thiel’s Founders Fund. The fintech says it has more than 2m customers across 17 European countries
- Currently, it provides trading and savings products, including commission-free trading for retail investors, and a monthly ETF savings plan through its partnership with BlackRock
What does this mean?
“You can grow to a $1bn company with the help of investors, but you can only grow to a $10bn company with permission from politicians,” Hecker said, adding that some US financial companies had failed to conquer Europe due to regulatory hurdles.
“If you’d told me at the beginning that it would take four years to get a banking licence, I would never do it again,” Hecker continued, admitting that the company has a “love-hate relationship” with the German regulator BaFin.
Hecker also said that the FinTech had built its entire banking infrastructure in-house, rather than relying on a separate banking software partner.
