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Germany’s second most valuable fintech, Trade Republic, has vowed to stay private after doubling its customers and tripling client assets to €100bn.
The Berlin-based company, often characterised as Europe’s answer to Robinhood because of its low-fee share brokerage business model, has been viewed as one of continental Europe’s most promising fintech IPO candidates after receiving a $5.4bn valuation in 2022.
But even as investment bankers hope for a rebound in stock listings and venture capital investors seek exits, Trade Republic co-founder Christian Hecker played down its prospects for a public market debut in an interview with the Financial Times.
“We are really not thinking about this at all — not over the short term, not over the medium term,” Hecker said.
Founded in 2015, Trade Republic started to accept its first clients in 2019. It has since grown to 8mn users and is now one of the biggest online brokers in Germany.
In comparison, Comdirect, the online-only arm of Commerzbank founded three decades ago, has 3mn clients and €135bn in client deposits, the listed German lender told the FT.
Hecker said he was confident the company could continue growing at least as fast as its current pace without raising additional funds, with “the bulk” of the $1.3bn raised during the past decade not yet spent.
“We are eyeing so many opportunities to grow in Europe,” Hecker said. Although two-thirds of its customers are currently based in Germany, Trade Republic is now eyeing France, Italy and other European countries as key growth markets.
The fintech said it had turned a profit in 2024 for the second year in a row, improving on the €14.1mn it reported for the 12 months to September 2023. Hecker declined to give a figure, however, with results due to be disclosed in public filings at a later date.
Its $5.4bn valuation turned Trade Republic into Germany’s second most valuable fintech after Berlin-based rival N26, according to Sifted.
But Trade Republic, which is backed by venture capital investors including Sequoia Capital and Peter Thiel’s Founders Fund, said it had received no pressure from investors to list early as its venture capital backers were taking “a long-term perspective”.
The company was strongly criticised by clients last year over delays to dividend payments due to an IT update, with its customer service department overwhelmed.
Hecker said that the issues had been “growing pains” caused by the rapid expansion that had since been addressed, with the company outsourcing the bulk of its customer service to allow it to handle sudden spikes in inquiries.
Trade Republic also faces a looming threat from the ban on so-called payment for order flow, which comes into force next year. The fintech currently generates a third of its revenues from the controversial practice, where market makers pay retail brokers for placing clients’ orders with them.
Hecker insisted that Trade Republic would be able to adjust, in part because it still had two substantial other revenue streams, and because he was confident the company would be able to substitute the lost revenues from payment for order flow.
A third of its revenues come from customer trading fees, and another third from asset managers paying to sell exchange traded funds to Trade Republic’s clients.
