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Trade Republic
Trade Republic
from Wikipedia

Trade Republic Bank GmbH is a German online broker and bank headquartered in Berlin. Shares, bonds, derivatives and cryptocurrencies can be traded on a mobile app.[1][2] As of January 2025, Trade Republic reported having eight million customers.[3]

Key Information

History

[edit]

Trade Republic was founded in Munich in 2015 under the name Neon Trading in the startup incubator of Comdirect Bank.[1][2] The company's founders are philosopher Christian Hecker, physicist Thomas Pischke and computer scientist Marco Cancellieri.[1] In 2017, Düsseldorf-based Sino AG invested in the startup and acquired the majority of the company's shares. In 2019 and 2020, venture capitalists Creandum, Project A Ventures, Accel Partners and Founders Fund invested over 60 million euros in Trade Republic; Sino sold shares and was henceforth no longer the majority owner.[4]

Securities trading via app was offered in Germany for a closed user group starting in February 2019 and without user restrictions starting in May 2019.[5] As of April 2020, Trade Republic had 150,000 users. More than one-third of customers had "never bought a stock or invested in an ETF before" according to Trade Republic. Users were "on average in their mid-30s" and "male".[6]

Trade Republic began offering its services in Austria in November 2020, as well as in France and Spain in 2021.[7][8] By the end of 2020, the company reportedly had 600,000 customers with four billion euros in assets under management. Eighty percent of users would have set up an equity or ETF savings plan. As part of GameStop's 2021 stock surge, Trade Republic imposed a stop-buy on select stocks, including GameStop's stock, on the afternoon of January 28, 2021. The broker cited the "extreme situation in the market" and investor protection as reasons for the decision. Over 4,000 complaints were later filed at Federal Financial Supervisory Authority over this decision.[9]

In May 2021, another financing round of $900 million was announced at a valuation of $5 billion.[10] In June 2022 Trade Republic raised another 250 million.[11] In June 2022, Trade Republic proceeded with layoffs due to an overgrowth of their work force and tightening business conditions.[12]

Trade Republic has been offering trading in fractional shares of securities since October 2022. Customers can purchase individual shares in stocks and ETFs for one euro per order.[13]

The broker began paying interest on cash deposits in January 2023.[14] Trade Republic received a full banking license at the end of 2023.[15] In 2024, the company launched its own payment card.[16] Since it is a German bank, it is supervised by the BaFin. Client money is deposited in an omnibus trust accounts with one of the following banks: Deutsche Bank AG, J.P. Morgan SE, HSBC Continental Europe S.A. and Citibank Europe plc.[17]

References

[edit]
Revisions and contributorsEdit on WikipediaRead on Wikipedia
from Grokipedia
Trade Republic is a German fintech company operating as an online broker and bank, providing commission-free access to investment products and banking services through a mobile-first platform. Founded in 2015 by Christian Hecker, Thomas Pischke, and Marco Cancellieri in Munich, it is headquartered in Berlin and holds a full banking license under the name Trade Republic Bank GmbH. The platform enables users to invest in a wide range of assets, including stocks, exchange-traded funds (ETFs), funds, corporate and government bonds, commodities (through ETFs), cryptocurrencies, and limited derivatives, starting from as little as €1, with automated savings plans available for long-term wealth building. In addition to investing, Trade Republic offers integrated banking features such as a current account with 2% gross annual interest on the balance (no amount limits), requiring activation, with interest calculated daily and credited monthly, no withdrawal restrictions, and valid for new and existing customers, a for spending and withdrawals (including unlimited free access worldwide above €100), and seamless money transfers. As Europe's largest retail platform by customer count, it serves over 10 million users across 18 countries and manages approximately €150 billion in as of late 2025. Backed by prominent investors including , Accel, and , the company has expanded rapidly since its inception, focusing on democratizing access to financial markets for everyday Europeans.

History

Founding and early development

Trade Republic was founded in 2015 in , , under the initial name Neon Trading by Christian Hecker, a philosopher; Thomas Pischke, a ; and Marco Cancellieri, a . The company emerged from the startup incubator of , where the founders aimed to create a streamlined platform for retail investing. Their vision centered on developing a mobile-first brokerage application to make stock and trading accessible to everyday European investors, addressing barriers like high fees and complex interfaces prevalent in traditional brokers. In 2017, Düsseldorf-based Sino AG invested €600,000 in Neon Trading, acquiring a 75% majority stake and providing crucial early capital to fund the technology build-out, including app development and regulatory preparations. This investment enabled the small founding team to expand operations, hiring initial engineers and compliance experts to refine the platform's core features, such as low-cost order execution and user-friendly mobile interfaces. The focus remained on bootstrapping a robust backend system capable of handling pan-European retail trading volumes while navigating BaFin licensing requirements. As preparations for market entry intensified, the company transitioned from the Neon Trading name to Trade Republic branding around 2018, signaling a shift toward a broader identity as a comprehensive republic for Europeans. Concurrently, the early team grew from the three founders to about a dozen members, incorporating specialists in and design. In line with Berlin's thriving , the team relocated its headquarters there post-2017 to access talent pools and scale development ahead of the launch.

Expansion into Europe

Trade Republic launched its mobile investment app in in early 2019, enabling retail investors to access , ETFs, and derivatives through a user-friendly platform for the first time. By April 2020, it had reached 150,000 users. This initial rollout focused on the German market, where the company quickly gained traction amid rising interest in commission-free trading. In late 2020, Trade Republic expanded into , marking its first international market entry and broadening its reach within the DACH region. The year 2021 saw accelerated growth with launches in in January and later that year, alongside entries into and the . These expansions coincided with rapid user acquisition, growing the customer base from around 600,000 at the end of 2020 to over one million by late 2021, fueled by increasing retail investment trends across Europe. By 2022, Trade Republic further scaled operations to 11 additional countries, including , , , , , , , , , , and , bringing the total to 17 markets. This wave of entries emphasized seamless integration for users in smaller and Northern European economies. In 2025, the platform reached 18 European countries with its launch in , its first outside the , while surpassing 10 million customers overall. To support these expansions, Trade Republic implemented localization strategies, including multi-language app support in languages such as German, English, French, Spanish, Italian, and Dutch to cater to diverse user bases. The company also prioritized compliance with local financial regulations, such as obtaining necessary approvals from national authorities and adapting features like tax reporting to meet country-specific requirements, ensuring operational scalability without compromising regulatory standards.

Key milestones and challenges

In 2021, Trade Republic experienced a significant surge in user growth amid the global retail investing boom, particularly driven by meme stock events such as the frenzy, which increased its user base from around 600,000 at the end of 2020 to over 1 million by late that year. This rapid influx led to trading restrictions on volatile stocks like and , drawing thousands of complaints to BaFin and regulatory scrutiny. The following year, in October 2022, Trade Republic introduced fractional share trading, allowing customers to invest in portions of and ETFs starting from €1, marking a key step in democratizing access to high-value assets across . However, amid broader economic pressures including rising interest rates and market uncertainty, the company conducted layoffs in June 2022, affecting a portion of its approximately 700 employees at the time as part of cost-cutting measures. In 2023, Trade Republic rolled out interest-bearing deposits in January, passing through the 's directly to customers—reaching up to 4% at the time—without fees, which helped attract savers during a period of high . Later that , the company achieved a major regulatory milestone by obtaining a full from the European Central Bank, enabling it to offer deposit protection up to €100,000 per customer and expand into lending and other banking services independently. By January 2024, Trade Republic launched its card, integrating spending with savings by offering a 1% "Saveback" reward on all purchases that is automatically added to users' interest-bearing accounts, with no monthly fees for the virtual or physical versions. In 2025, Trade Republic's growth continued, with its employee count reaching approximately 1,200 and surpassing €100 billion by early in the year; the platform also grew its user base to 8 million customers across . In January, it opened national branches in , , and to accelerate localized operations. By September, following the launch in , the company surpassed 10 million customers and €150 billion in ; it also introduced investments in private markets through partnerships with Apollo and EQT, starting from €1, and expanded to products in October. Despite these achievements, the company has faced ongoing challenges with technical glitches, including a major outage on April 7, 2025, when heavy trading volume during a global plunge—triggered by U.S. announcements—prevented thousands of users from accessing the app and executing trades for several hours.

Business model

Revenue generation

Trade Republic sustains its commission-free trading model through a diversified set of streams, primarily centered on high-volume retail investor activity across . The has shifted away from traditional brokerage commissions, instead adopting a low-cost, high-volume approach that attracts millions of users by minimizing direct fees on trades while generating income indirectly through partnerships and financial products. This strategy enables Trade Republic to offer accessible investing options, with scaling alongside its growing user base and (AUM). The core revenue source is (PFOF), where Trade Republic routes customer orders to market makers who execute trades and pay the platform a for the flow, typically a fraction of a cent per share or . This practice accounted for approximately one-third of total revenue in 2024, allowing the company to forgo commissions on standard trades (except a €1 external settlement ) and pass better execution prices to users in many cases. PFOF has been a foundational element since inception, supporting the platform's expansion without burdening retail investors with upfront costs. Interest income on uninvested cash balances represents another major stream, introduced in January 2023 as Trade Republic began passing through (ECB) deposit facility rates directly to customers. Rates have varied with ECB policy, reaching up to 4% in earlier periods of 2023 and 2024, and standing at 2% as of late 2025, applied to unlimited balances with monthly payouts. By October 2025, the company had distributed €2.5 billion in to users, underscoring the scale of cash holdings and its contribution to profitability. This model invests client cash in low-risk securities, earning a spread between yields and customer rates. In October 2025, Trade Republic expanded its offerings with products, including bond ETFs and access to and corporate bonds, providing new opportunities for diversified revenue through trading and interest-related activities. Supplementary revenues include spreads on trades, where Trade Republic earns from the difference between buy and sell prices, alongside a €1 settlement fee per transaction. While savings plans for automated investments remain free of brokerage fees, the platform generates modest income from ancillary services, such as optional premium card variants or event-related charges, though the core focus remains on core trading and cash management flows. These streams support operational sustainability without subscription models. In 2025, Trade Republic's financial performance reflects the efficacy of this model, with profitability maintained from prior years amid rapid growth to over 10 million users and €150 billion in AUM as of 2025. The company reported its first net profit of €14.1 million in 2023 on revenues exceeding €190 million, a trend that continued into 2024 and positioned it for further expansion in 2025 through diversified income and cost-efficient . This scale highlights how the approach has driven while democratizing access to investments for retail users.

Technology and operations

Trade Republic operates a mobile-first platform, with its primary interface available as a dedicated app for and Android devices. The app emphasizes simplicity in design, featuring an intuitive that allows users to open accounts, execute trades, and manage portfolios with minimal steps. This approach supports real-time trade execution, enabling instant order placement and access directly from mobile devices. The backend infrastructure provides access to across 7 stock exchanges, offering over 7,500 and more than 2,000 ETFs across major markets. This connectivity facilitates broad investment options, including securities from German and international listings, executed through partnerships that ensure efficient order handling. Automation plays a key role in Trade Republic's operations, particularly in order routing and , where algorithmic processes optimize execution speeds and mitigate potential exposures. While specific AI implementations are explored in areas like recommendations and compliance workflows, the platform relies on automated systems to handle trade flows and ensure cost efficiency. The company's operational hub is centered in , , where approximately 1,200 employees manage core functions including compliance, customer support, and IT development. This centralized structure supports platform scalability and regulatory adherence across its European footprint. Security features include mandatory two-factor authentication for all logins and account activities, enhancing protection against unauthorized access. Additionally, client deposits are safeguarded up to €100,000 per investor through the German deposit guarantee scheme, covering funds held in accounts at partner banks.

Products and services

Investment offerings

Trade Republic provides commission-free trading for a range of investment products, including , exchange-traded funds (ETFs), bonds, funds, and limited derivatives from issuers such as HSBC, Société Générale, UBS, and Vontobel, accessible via its across global markets. Users can execute trades in these assets with a flat fee structure that eliminates traditional commissions, making it suitable for retail investors seeking low-cost entry into diverse markets. The platform connects to seven stock exchanges worldwide, enabling exposure to international equities and fixed-income securities from major regions. Orders for stocks, ETFs, and bonds are executed on the LS Exchange, an electronic trading system operated on the Hamburg Stock Exchange, with spreads linked to the Xetra reference market where applicable. The app displays real-time prices monitored on reference exchanges such as Xetra, which serve as indicative prices for spread determination. This can lead to deviations between the displayed prices and actual execution prices due to differences in market conditions and liquidity on the LS Exchange. Limit orders are executed at the specified limit price or better when a matching counterparty is available. However, even if the indicative price (e.g., from Xetra) reaches or crosses the limit price during trading hours, the order may not execute if there is insufficient liquidity, no suitable counterparty, wide bid-ask spreads, or low trading volume on the execution venue. Trade Republic support states that non-execution of limit orders typically occurs because the market price has not reached the limit, though liquidity constraints on the execution venue can contribute in some cases. For German residents investing in French stocks, Trade Republic automatically applies the reduced 12.8% withholding tax on dividends, such as those from companies like Veolia and LVMH, which is fully offset against the German Abgeltungsteuer. In addition to traditional assets, Trade Republic supports cryptocurrency trading for over 50 major digital assets, such as and , with 24/7 availability to align with the non-stop nature of crypto markets. This feature allows users to buy, sell, and hold cryptocurrencies directly within the app, with custody provided by a regulated third-party custodian for . Real-time quotes are available for all instruments during market hours, supplemented by basic analytics tools like charts and news feeds to aid decision-making. Trade Republic also provides exposure to commodities, particularly precious metals such as gold and silver, through exchange-traded funds (ETFs). This includes leveraged inverse ETFs enabling short positions on the prices of gold and silver, such as WisdomTree Gold 3x Daily Short (ISIN: IE00B6X4BP29) and WisdomTree Silver 3x Daily Short (ISIN: IE00B8JG1787). Direct commodities trading (e.g., futures contracts or CFDs) or traditional margin-based short selling of individual assets is not available. A key offering is the equity and ETF savings plans, which enable automated monthly investments starting from €1, allowing users to build positions in or over time without incurring fees. These plans cover more than 4,900 assets, including popular indices and sector-specific funds, promoting long-term wealth accumulation through dollar-cost averaging. Similarly, savings plans extend to cryptocurrencies, facilitating recurring purchases of digital assets from the same low entry point. For French residents, Trade Republic offers the Plan d'Épargne en Actions (PEA), a tax-advantaged investment account that is commission-free with 0 € fees on automatic investment plans, up to a ceiling of €150,000, and standard tax exemption on capital gains after 5 years of holding. Fractional share trading, introduced in 2022, permits investors to purchase partial shares of , ETFs, and bonds, starting at €1, thereby democratizing access to high-priced assets like blue-chip . This functionality applies to over 7,500 , more than 2,000 ETFs, and over 500 bonds, providing flexibility for smaller portfolios without requiring full share ownership. Overall, the platform offers access to more than 10,000 instruments, emphasizing simplicity and affordability for European users. In September 2025, Trade Republic launched access to private markets, allowing users to invest in private equity and debt opportunities with a target annual market return of 12%. In 2025, the platform introduced products, including bond ETFs offering multi-year returns and direct access to U.S. and corporate bonds.

Banking and ancillary features

In December 2023, Trade Republic obtained a full from the (ECB), with supervision by the German Federal Financial Supervisory Authority (BaFin), enabling the company to directly offer deposit-taking and payment services to its customers. This license expanded Trade Republic's capabilities beyond brokerage services, allowing it to hold customer deposits securely and facilitate seamless payment processing within its platform. Deposits are protected up to €100,000 per customer through the German statutory deposit guarantee scheme. A key feature enabled by the is the provision of on uninvested balances held in the current account, offered at competitive rates that reflect the ECB's deposit facility rate. As of 2026, this is 2% gross per annum on the current account balance with no limits on the amount for most European customers. Interest is calculated daily, credited monthly, requires activation, has no withdrawal constraints, and is available to both new and existing customers, providing a low-risk savings option integrated into the app. Trade Republic has passed on over €2.5 billion in such to customers since January 2023, as of October 2025, emphasizing its model of direct rate pass-through without retention for profit. In January 2024, Trade Republic launched a Visa debit card, allowing users to spend from their invested funds while earning a 1% Saveback reward on every payment, which is automatically reinvested into their savings or portfolio for enhanced budgeting and wealth accumulation. The card integrates directly with the app, offering real-time transaction tracking, spending categorization, and seamless linkage to cash balances or investment holdings to support disciplined financial management. No monthly fees apply, with options for virtual, classic (€5 one-time), or premium (€50 one-time) versions, and it supports contactless payments across Europe and unlimited free ATM withdrawals worldwide for amounts above €100. Deposits and withdrawals are processed exclusively via SEPA transfers from the user's linked reference bank account. Trade Republic does not support direct deposits of physical cash, as the company operates without physical branches or partnerships for cash deposits at ATMs, retail points, or other locations. Users holding physical cash must first deposit it into their traditional bank account before transferring the funds to Trade Republic via SEPA. These transfers are typically free and can be instant in many cases, with no fees for amounts over €100 and no minimum balance requirements, ensuring high and for users managing their funds. This feature supports free inbound and outbound transfers between Trade Republic accounts or external banks, typically completing within seconds for instant SEPA-eligible transactions. To complement these banking services, Trade Republic provides in-app tools such as portfolio trackers that display real-time performance metrics, breakdowns, and historical growth charts to help users monitor their overall financial health. Additionally, the platform includes educational resources tailored for beginner investors, featuring tutorial videos, interactive guides on banking features, and basic investment modules to foster informed .

Funding and growth

Investment rounds

Trade Republic's earliest significant external funding came in 2017 when Sino AG, a German brokerage firm, invested €600,000 in the startup, acquiring a stake to support its initial development. In July 2019, the company raised €10 million in a led by European firm Creandum, with participation from Project A Ventures, bringing total funding to over €17 million at that point. This capital helped lay the groundwork for product enhancements and early market entry. The following year, in April 2020, Trade Republic secured €62 million in a Series B round co-led by Accel and , increasing cumulative funding to approximately €80 million. A major milestone occurred in May 2021 with a $900 million Series C round led by , joined by TCV, , and existing investors including Accel, , Creandum, and Project A; this infusion primarily fueled European expansion efforts. In June 2022, Trade Republic extended its Series C with an additional €250 million led by the Board, alongside participation from prior backers, resulting in a of €5 billion. No further primary funding rounds have occurred since. By mid-2025, Trade Republic had raised more than €1.2 billion in total funding across these rounds, enabling sustained technological advancements and market growth.

Valuation and key investors

Trade Republic achieved a valuation of approximately €5 billion following its Series C funding round in 2021. This milestone solidified its status, with the valuation reflecting rapid user growth and market expansion at the time. By October 2025, the company's valuation remained around €5.3 billion, supported by sustained operational scaling. The 2021 round was led by , with significant participation from investors including Creandum, Project A Ventures, Accel, and . Earlier backing came from Sino AG, which provided seed funding in 2017. These strategic investments not only fueled product development and European expansion but also enabled Trade Republic to reach profitability, reporting its first full-year net profit in 2023, announced in early 2024. User base expansion has closely correlated with these valuation dynamics, doubling to 8 million customers by January 2025 and surpassing 10 million by September 2025. This growth, alongside reaching €100 billion in early 2025 and €150 billion later that year, underscores the company's robust trajectory. In September 2025, existing investors began exploring a secondary share sale valued at up to €1 billion, which could potentially more than double the prior valuation benchmark. As Europe's leading neobroker by customer count, Trade Republic holds a dominant market position, managing client assets exceeding those of many traditional incumbents across 18 countries.

Regulation and controversies

Trade Republic Bank GmbH is regulated by the (BaFin) in , which oversees its operations as a fully licensed bank following the granting of its by the European Central Bank (ECB) in December 2023. This supervision extends to both banking and investment services, ensuring adherence to stringent standards for and . As a German institution, Trade Republic is also subject to oversight by the , which collaborates with BaFin on prudential . The company complies with the European Union's Markets in Financial Instruments Directive II (MiFID II), which mandates enhanced transparency in trading, investor protection measures such as best execution policies, and detailed reporting of transactions. To meet these requirements, Trade Republic utilizes services like the Stock Exchange's TTR II platform for publishing over-the-counter trades in a MiFID II-compliant manner. Customer deposits are safeguarded through the German Deposit Guarantee Scheme, providing protection up to €100,000 per client in the event of , with funds held in segregated accounts at partner banks that are members of the scheme. Leveraging passporting rights, Trade Republic extends its services across 18 European countries without needing separate licenses in each , facilitating cross-border operations while remaining under BaFin's primary supervision. To maintain its licenses, the firm implements robust (KYC) and Anti-Money Laundering (AML) procedures, including video-based identification processes during onboarding to verify customer identities and prevent illicit activities. BaFin conducts regular audits and ongoing monitoring to ensure continuous compliance with these and other regulatory obligations. In early 2021, amid the surge in shares, Trade Republic temporarily restricted buy orders for several volatile stocks, including , on January 28, leading to significant user backlash. This decision prompted 4,426 complaints to the (BaFin) in January alone, primarily over the halted trading access. BaFin issued an admonishment to Trade Republic for the suspension, highlighting concerns about during high-volatility periods. Trade Republic's (PFOF) revenue model has faced ongoing scrutiny for creating potential conflicts of interest between the broker and market makers. By 2025, this practice drew attention from European regulators, culminating in the EU's decision to ban PFOF across the region starting in 2026, directly affecting Trade Republic's operations. Although a 2022 German study suggested PFOF could yield favorable execution outcomes for investors in certain scenarios, critics maintain it incentivizes routing orders to less competitive venues, potentially harming retail clients. In February 2025, the Consumer Protection Center of Baden-Württemberg filed a complaint against Trade Republic for misleading advertising regarding its high-yield deposit interest promises. Customer service issues have been a persistent point of criticism, with users reporting prolonged delays in issue resolutions and inadequate support, especially during technical disruptions. According to figures from the Federation of German Consumer Organizations (vzbv), complaints about Trade Republic more than doubled in 2025. In April 2025, Trade Republic encountered an outage amid a sharp stock market decline, resulting in loading delays when viewing portfolios for some customers, though trading remained possible, which exacerbated frustrations over response times. In November 2025, the company drew further criticism for delays in depot transfers that sometimes lasted weeks, with competitors urging BaFin to investigate. Independent reviews have rated the company's support as poor, citing limited channels and slow automated handling that fails to address complex queries effectively. Users have reported issues with limit order execution, where such orders were not filled despite the asset price reaching or surpassing the limit price within trading hours. Trade Republic's support typically attributes these non-executions to the market price not having reached the limit price. In contrast, user reports point to additional factors, including insufficient liquidity, lack of a matching counterparty at the limit price (e.g., due to large bid-ask spreads or low trading volume), and potential discrepancies between indicative prices displayed in the app (often from venues like Xetra) and actual execution on the LS Exchange. These reports have contributed to broader user dissatisfaction and scrutiny regarding the reliability of order execution on the platform. Broader public scrutiny has targeted Trade Republic's marketing approaches, which some argue aggressively target novice investors and downplay inherent risks. The platform's gamified app design and promotional incentives have been faulted for fostering impulsive trading behaviors among inexperienced users, contributing to concerns over investor protection in the neobroker space. These criticisms intensified following high-profile market events, underscoring debates about the ethical implications of such strategies for retail participation.

References

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