Founded in 2019, Trade Republic has rapidly become one of Europe’s leading broker and savings platform, marking a significant presence in the financial landscape. Since its foundation, the platform has attracted 4 million customers across 17 countries and manages assets worth approximately 35 billion euros.
This article dives into key statistics surrounding Trade Republic, including its assets under management (AUM), user base growth, revenues, and other critical metrics that reflect its evolving role in the European financial ecosystem.
Revenues
As a private company, it is difficult to get a complete picture of its financial statements. In the German company register, the company’s official name is “Trade Republic Bank GmbH”. The latest available information (30.09.2022) shows a relatively healthy balance sheet. The assets comprise €1,894mn, and the liabilities side is €1,506mn. However, it made a net loss of €145mn.
According to the Financial Times (article from January 2024), Trade Republic co-founder Christian Hecker reported a “solid double-digit million euro amount” of net profit in the year ending September 2023.
Trade Republic AUM and number of users
As of October 2024, the Assets Under Management (AUM) of Trade Republic was €35 billion in client assets and cash. Besides, the number of users was 4 million, spread over 17 countries, as shown on their website:
Average account balance
By dividing the assets under management by the number of accounts, we get an estimated average account balance of €8,750 per user.
Who are Trade Republic investors?
Trade Republic is backed by several well-known investors/funds, such as:
- Sequoia
- Founders Fund
- Ontario Teachers
- TCV
- ACCEL
- Thrive Capital
- Creandum
Business model
As a brokerage firm, Trade Republic’s main revenue source is related to the users’ transactions in stocks, ETFs (exchange-traded funds), cryptocurrencies, and other financial products.
Here’s a breakdown of how Trade Republic earns money:
1. Transaction fees
Although Trade Republic markets itself as commission-free, it charges a flat fee of €1 per trade, called an “external settlement cost”. This covers operational expenses such as order routing and settlement. Compared to traditional brokers, this fee is considered small, but it still provides Trade Republic with a consistent revenue stream from active traders.
2. Payment for Order Flow (PFOF)
One key way that Trade Republic earns revenue is through Payment for Order Flow (PFOF). This practice involves receiving payments from market makers (such as financial institutions or liquidity providers) in exchange for routing clients’ trades to them. While the end-user gets commission-free or low-fee trading, Trade Republic monetizes the transaction by sending it to a specific market maker, compensating the platform. According to the same Financial Times article above, “Payment-for-order-flow agreements only accounted for about a third of Trade Republic’s overall income, Hecker [Co-founder of Trade Republic] said” (our bold).
PFOF can be controversial, as it raises concerns about potential conflicts of interest in how orders are executed (e.g., ensuring the best price execution for the user). According to this paper, prepared on behalf of Trade Republic, PFOF “does not harm private investors. On the contrary, customers benefit from this new”.
However, the European Union has agreed a general ban on PFOF. This practice must be phased out by 30 June 2026.
3. Securities lending
Another revenue stream comes from securities lending. Trade Republic can lend out the securities held in users’ portfolios (typically to institutional investors, hedge funds, or other entities) for short-selling or other purposes. The firm earns fees or interest on these loaned securities, while the user retains ownership.
Please note that since Trade Republic passes through the entirety of the “deposit facility rate” (3.50%) to its customers, it effectively gets no revenue from the clients’ uninvested cash.
As a curiosity, DEGIRO takes the opposite approach (pays no interest).
Trade Republic valuation
Trade Republic, a German-based fintech company, reached a valuation of over $5 billion USD after its Series C funding round in 2021, led by Sequoia Capital. In 2022, it raised an additional €250 million in a Series C extension, led by the Ontario Teachers’ Pension Plan Board (Ontario Teachers’), reaffirming this valuation.
In 2023, it received a full-scale European banking licence which may increase the company’s overall valuation for next funding rounds (or IPO valuation), if needed.
Is Trade Republic planning an IPO?
To the best of our knowledge, Trade Republic has not made any official announcements or confirmed plans to pursue an initial public offering (IPO). The company has not made any public statements or shared press releases indicating an intention to go public.
Still, in a recent podcast, Johan Brenner (one of Trade Republic’s VC investors) predicted that Trade Republic would be a public company in 5 years, anticipating an IPO in the next few years.
The decision to pursue an IPO in the future is not straightforward. Various factors, such as the company’s financial performance, future prospects, market conditions, regulatory environment, and strategic growth plans, have a major impact on such a commitment.
Several Trade Republic competitors like Interactive Brokers, XTB and DEGIRO are listed on stock exchanges, so it is something that Trade Republic may aspire to achieve as well.
Competitors statistics
Curious to get a similar analysis on Trade Republic competitors? We have also explored Trading 212, Interactive Brokers, and eToro.
Bottom line
Trade Republic has grown rapidly, becoming a major player in the European fintech and brokerage market. With 4 million users across 17 countries and €35 billion in assets under management (AUM) as of October 2024, the platform has shown impressive scale.
While the company initially posted losses, its shift to profitability by September 2023 reflects strong business fundamentals. Revenue is primarily driven by transaction fees, payment for order flow (PFOF), and securities lending, despite the forthcoming EU ban on PFOF by 2026.
Additionally, Trade Republic’s valuation, hovering around $5 billion USD, is supported by major investors like Sequoia and Ontario Teachers’. The firm has yet to announce plans for an IPO, though it has secured a full European banking license, potentially setting the stage for future expansions.
