In 2009, banks charged $30 per transaction, and after ten years, little has changed: the commission became $25, which is an unbearable amount for a novice investor. The quality of digital services also left much to be desired: they were created for professional traders.
Then he decided to create a service that would make investments accessible to everyone. The idea of trading fractional stocks came later and immediately became a key one.
Three things give a special charm to a startup:
- Accessible to novice investors with a small capital: this is a service for trading ETFs and fractional stocks from the NYSE and Nasdaq exchanges.
- Free trading: Gotrade does not charge a commission for trades.
- You can become a client only by invitation: such a closed club of investors.
Thanks to a wide and well-thought-out network of partnerships, Gotrade provides unique opportunities for trading in the American market. The fact is that Indonesian brokers are not allowed to offer foreign securities in the country, only their derivatives. So people who want to invest in US stocks have to go through foreign brokers, and that's expensive.
Gotrade Indonesia offers a derivative instrument fully backed by listed US stocks. Money is sent to the future and transactions are made through the Indonesian financial conglomerate Valbury Group and listed on the Jakarta Futures Exchange. Then the American broker Alpaca Securities LLC executes orders at the best conditions on the exchange.
In America, the most similar services are Robinhood, SoFi, and Stash, but the founders of Gotrade consider interactive brokers such as Saxo Bank and eToro to be direct competitors.
Investments for everyone
Gotrade gives you access to the smallest parts of shares, down to 0.000000001. Nearest competitors such as Pluang offer tenths of a share. They have a piece of Amazon that will still cost more than $300, and in Gotrade Indonesia - $1.
If you set a budget for the purchase in the application, it will calculate how many shares of which shares you can buy for this amount. Like most services for beginners or relatively inexperienced investors, Gotrade offers educational content and news and deciphers complex terms.
A startup earns by converting local currencies, which investors replenish the account, into dollars: commission from 0.5% to 1.2%. Gotrade is also preparing to launch a premium plan: for $2 per month, users will have access to advanced analytics, recommendations, and forecasts.
People appreciated Gotrade very quickly. More than 500 thousand people from 150 countries became clients in two years. They made about 5 million transactions for a total amount of more than $400 million.
About 65% of Gotrade users have previously traded stocks, while the rest are novice investors. Most of them used to invest in local stock markets because they didn't have access to others. The largest segment is people from 25 to 34 years old, the average account size is about $500.
A little less than a year ago, Gotrade (https://www.crunchbase.com/organization/gotrade) received its first $7 million investment, and the other day another $15.5 million from Velocity Capital Fintech Ventures. The money will be used to expand the team, which now has 40 people, and launch localized versions of the product in Southeast Asia.