British fintech Freetrade is trying to double valuation when it comes to fundraising

British fintech Freetrade will raise a valuation of $650 million in a new round of crowdfunding.

The group launched its seventh public funding round on Wednesday since it was founded in 2016. The London-based startup also most recently raised money from traditional venture capital investors worth £270 million in March.

The sharp rise in Freetrade's valuation comes as retail stock trading boomed during the Covid-19 pandemic, giving Robinhood brokers in the US a rush of younger customers and new cash to established players such as Britain's Hargreaves Lansdown.

In the UK, customers opened 7.1 million investment accounts in the first 12 months of the pandemic, according to the latest figures from the Financial Conduct Authority.

Freetrade, which recently acquired over $1 billion in assets

Adam Dodds, CEO of Freetrade, told the Financial Times in September that “Battleground Europe” of investment apps would emerge next year.

“What we have seen in the last two years is that the theory that Europeans don't invest and don't care about the stock market is not true,” he said.

Freetrade - which has 600,000 funded accounts, up from 150,000 at the start of the year - is expected to make sales of £15m this year, up from £3m last year. However, it was still forecast to make a loss before interest, tax, depreciation and amortization of £26m as it continued to invest in technology and marketing.

The company, which charges investors foreign exchange fees for their trading and offers a premium monthly subscription, said its new valuation target represents a multiple of 13 times forecast 2022 revenue, excluding new lines of business such as cryptocurrency trading. The plan is to launch this in the new year and compare the moves of peers such as Revolut, Germany's Scalable Capital and Robinhood in the US.

French mobile payments app Lydia said this week it would allow its 5 million users to trade cryptocurrencies as well as stocks, ETFs and precious metals. “Driven by the pandemic, trading has found unprecedented appetite among retail investors,” the company said.

Freetrade's push into crypto runs counter to a campaign by UK regulators to discourage high-risk investments among retail customers. The FCA said it wants fewer first-time investors to get into digital tokens and has raised concerns that clever trading apps "[make] it easier for consumers to make bad decisions" - pointing to the sharp rise in sign-ups during the US meme stocks craze in January.

Freetrade counts 13,000 individual shareholders as its largest ownership group, alongside venture capitalists such as Left Lane Capital and Molten Ventures, formerly known as Draper Esprit.

It said it would open its crowdfunding to European investors for the first time as it aims to raise up to £13 million. The company hopes to launch services across Europe next year, pending regulatory approval from Swedish authorities.