lightyear is a new stock trading app from early wise employees
Introducing Lightyear: A New Commission-Free Trading App
Lightyear, a freshly launched startup based in London, is emerging from stealth mode today. The company is dedicated to developing a stock trading application distinguished by its commitment to a genuinely commission-free experience.
Beyond eliminating account and trading charges, Lightyear also forgoes fees associated with foreign exchange transactions – within specified limits.
Founders with a Proven Track Record
The two individuals who established Lightyear initially collaborated while employed at Wise (formerly TransferWise). This background explains the company’s emphasis on providing competitive foreign exchange rates.
Martin Sokk, serving as co-founder and CEO of Lightyear, contributed to Wise from 2012 to 2017. During his tenure, he fulfilled roles including Head of Product, Head of People, and Head of Operations.
Mihkel Aamer, Lightyear’s other co-founder and CTO, functioned as an engineering lead at Wise between 2013 and 2019.
Addressing the Shortcomings of Current Investment Platforms
“Throughout my career in financial services, I’ve observed both positive and negative aspects. I firmly believe that retail investing in Europe currently suffers from significant drawbacks – characterized by hidden fees, limited access, and overly complex products,” stated Aamer.
“Our goal is to rectify this situation by democratizing investment opportunities, enabling individuals to participate in global markets with any investment amount.”
App Features and Availability
Users can anticipate a mobile application facilitating the buying and selling of shares and ETFs.
At launch, the platform will offer access to 1,500 stocks and ETFs across various markets.
No fees will be charged for account maintenance, trading activities, or foreign exchange – up to a monthly limit of £3,000. Beyond this threshold, a 0.35% FX fee will apply.
Currently, the application is in its final stages of development. Lightyear is initiating a waitlist today, with the product expected to become available during the third quarter of this year.
Funding and Investors
Lightyear has secured $1.5 million in pre-seed funding. This round was co-led by a new, unnamed fund established by Wise co-founder Taavet Hinrikus and Teleport co-founder Sten Tamkivi.
This investment marks the fund’s inaugural venture. Jaan Tallinn, a co-founder of Skype, is also participating as a co-leader through Metaplanet.
The funding round also includes contributions from several angel investors, such as Ott Kaukver (Checkout.com CTO), Wander Rutgers (former president of Robinhood U.K.), and Kaarel Kotkas (Veriff founder).
Competitive Landscape
While the investor list is impressive, Lightyear will encounter substantial competition from existing startups.
Competitors may impose higher fees, but they have already established a strong market presence. For example, Trade Republic, a Berlin-based trading app, recently raised $900 million.
In the U.K., Freetrade has successfully attracted a user base of 600,000.
Challenging Traditional Brokers
Importantly, Lightyear also faces competition from established brokerage firms.
Unlike the situation in the U.S., a significant portion of retail investors in Europe still rely on conventional banks and online platforms for stock trading.
The market has the potential to accommodate multiple players. The coming months will reveal how effectively Lightyear executes its strategy.