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London Tech Week

Founder in Focus: Martin Sokk on building the Robinhood of Europe

Lightyear Photographer: Tom Harrison

Lightyear, the investment platform, has launched a much-demanded web application, allowing its user to make and manage their investments just as easy on their computers as on their phones. The move from being a device-only platform comes only a year after Lightyear was launched, and is the latest of the company’s improvements to their platform as they learn more about the customers they serve.

Last year, the London-based investment platform secured $25 million in a Series A equity funding, led by Lightspeed Venture Partners, Mosaic Ventures, Taavet+Sten, Metaplanet and British billionaire Richard Branson.

Its local competitors include Berlin’s Trade Republic, The Netherland’s Bux, Israel’s eToro and the UK’s Freetrade, Trading 212 and more.

Martin Sokk, Lightyear’s co-founder and CEO, joined TFN to talk about how he started Lightyear, and how their plans are to go deeper, rather than wider, to continue Lightyear’s success.

Building an investment platform for Europe

Sokk started in fintech with Taavet Hinrikus-founded Wise, previously TransferWise, joining in 2013. The product, he recalls, was basic at the time, but the fundamental purpose was there. “The idea was that you use technology to move money quickly around the world,” he said. “It was crazy how expensive it was in the old world.”

And, inevitably, his experience at Wise meant he started to look at other problems with his co-founder, Mihkel Aamer. “We were at Wise for five or six years, and one day, we were discussing how investing doesn’t really work in Europe, but in the US, works quite a bit better.” The result was Lightyear, and a mission to address what Sokk says are the two difficulties that were stopping people investing.

“We realised that the infrastructure is not being built in Europe. And the education is not taking place in Europe,” Sokk told us. “Europe is fragmented into different markets and everybody has their own currency, but nobody was putting all that together in a usable, low-cost brokerage platform. And people just don’t know how to invest, in the US, roughly half of the people have some exposure in the investment market. In Europe, it’s around 15%.” Lightyear aims to provide a unified solution, giving people the tools and information they need, whether they want to invest globally or just in their local market.

Sokk sees Lightyear as correcting the flaws that exist in competitor applications, “most apps only operate in one country, so UK apps operate in the UK, but Germans or Estonians will have no access.” Even where apps worked in multiple markets, the structures in place would discourage use. “You need to have a really good fee and cost structure, but as Europeans, we always have the wrong currency!” The result is that because most brokers only offer accounts in their home currency, trades in other markets would mean a conversion when you buy and sell. Lightyear operates in 21 markets, but aims to be local for everyone, regardless of the market they are in.

The ‘Robinhood of Europe’ has also launched features like Portfolio Insights, allowing investors to research, Profit and Loss explainers, so people can see exactly what has been happening with their portfolios, and even interest on non-invested balances.

Finding success through customer knowledge

But while Lightyear might have been empowering their customers with easy trading and more information, their customers have also been driving the improvement of the Lightyear product.

Unlike many start-ups, Sokk is not being gung-ho about expansion. Although they have opened in 21 markets since their launch, surprisingly there are no plans to offer Lightyear to the US market. Instead, their plans are to ensure they are fully serving the European market. “The reason American companies struggle to come to Europe is that they think of Europe as like America: one language, one system, and it’s not. We have different countries, and people, and cultures, and views.” It means that no one has successfully managed to build an app that offers full European coverage, and that is Lightyear’s current objective.

That focus on identifying a defined market and serving it well has been a key part of Lightyear’s growth. In a world that is often app-focused a web application may seem a strange innovation, but it was developed so soon after launch because so many customers, 57% according to their research, wanted it. For Sokk, constantly producing value for their customers has been a key driver of success.

“Reducing fees, introducing interest on balances, everybody has been loving that, and we can see money coming to our platform because it always earns money.” Sokk believes that demand for the web application came from their customers becoming more mindful. Most investment transactions can be done on a phone, but customers wanted to use bigger screens because it made analysis and understanding easier. “And the more solutions we offer, the more we can think about the long-term future.”

Lightyear’s next step is to look at how they can support the business investor. The platform already had a limited business account function, but Sokk says that this is soon to be expanded. Sokk is keeping the details under wraps, but again, it comes from meeting customer demand. “A lot of VC backed startups are looking at ways to actually make more out of their money,” says Sokk. “We are definitely focusing on helping businesses to think about how to make extra revenue and put their money to work.”

Sokk might stand out as a founder who is not eager to expand into the US. However, while many will point to the size of the US market, they forget Europe, with over half-a-billion people, is actually bigger. Rather than spreading thinly across the world, by going deeply into the European market, Lightyear is meeting with success, despite still being a very young company. The secret, Sokk says, is the customer. “Every time we launch something, we ask customers, ‘what do you want?’” Not only are they building a loyal customer base, but also an unbeatable product: “by listening to customers and building a product that meets their needs, we are providing value right out of the gate.”

Interview by Akansha Dimri

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