At Gratisbroker, customers can trade securities for free. In our 7 questions, the founders explain how their company still makes money.
Munich Startup: Who are you and what do you do? Please briefly introduce yourself and your services!
Free broker: The three of us founders all come from the banking industry and worked together at the former DAB Bank—Malte from Product Management Trading, and Stefan and Philipp from IT. We're all in our mid-forties and have a few years of experience under our belts. This may not make us your typical startup founders, but our motivation is comparable: we want to shake up the German brokerage market and take it to a new level with a completely free trading option.
We understand both sides of the trading business, as in addition to our professional backgrounds, we are also active private traders. We therefore know exactly what it takes to operate profitably without significantly restricting our clients. Our concept is simple: We offer completely free securities trading, but with us, you can only do exactly that: trade for free. You'll have to get market information and hot tips elsewhere. Likewise, you won't find other banking products like a checking account with us. By reducing costly add-ons, fully automating processes, and leveraging new IT technologies, we rely on the payments from our trading partners, which we, like all other brokers, receive for facilitating order flow.
No fees, but a minimum order volume
Munich Startup: But that's been around for a long time!
Free broker: No, that hasn't been the case yet. After the introduction of online banks in the 1990s, the discount brokers of the time, there was no substantial development of the securities trading business model for a long time. Despite intense competition, a relatively stable pricing policy has existed ever since. That changed abruptly this year. The Trade Republic app got there first, but it targets a different audience than we do and isn't completely free. They simply offer trading for a flat fee of €1 per order. With us, all securities can be traded completely and permanently without fees—there is only a minimum order volume of €500 when purchasing.
Munich Startup: What are the three main ingredients for your recipe for success?
Free broker: We believe we share a strong competitive spirit, a desire to convince while remaining realistic at the same time—that's what many years in the business entail. And a good network is also, and perhaps especially, crucial when starting a business.
Free brokers just recently launched on the market
Munich Startup: Let’s get to the point: How is business going?
Free broker: We only went live at the beginning of November, after launching the beta phase in September/October. Since then, we've already convinced several hundred customers of our offering without investing a large marketing budget. We're delighted with the positive response and are very satisfied so far.
Munich Startup: What does Munich mean to you?
Free broker: All of them have moved here but now somehow feel at home. The prices in the city, whether for offices or salaries, certainly do not provide any support for founders, but anyone who still wants to have a Fintech-foundation can only win.
Munich Startup: How can your startup become the next unicorn? Or will we see you soon at Epic Fail Night?
Free broker: We don't even have time to celebrate our successes right now, so we certainly won't be showing up at a fail night.
Unicorn isn't the goal, but rather rapid, organic growth. This will enable us to become profitable faster than all our competitors and capture our share of the brokerage market pie.
Munich Startup: Hiking or beer garden?
Free broker: Walk into the beer garden.
