The Lightyear app.
Lightyear
A few of the largest names of Estonia’s tech scene are backing Lightyear, a startup trying to turn into Europe’s reply to commission-free buying and selling pioneer Robinhood.
Based mostly in London, Lightyear develops an app that lets customers spend money on a spread of over 5,000 shares, exchange-traded funds and cash market funds. It was based by two former Smart staff, Martin Sokk and Mihkel Aamer, in 2021.
The corporate is about to announce afterward Thursday that it has raised $23 million in a brand new spherical of funding led by NordicNinja, a Japanese-backed enterprise capital fund primarily based in Europe. Estonian tech entrepreneur Markus Villig, who co-founded ride-hailing unicorn Bolt has additionally invested.
Lightyear CEO Sokk informed CNBC that the agency did not essentially want to lift extra cash for the enterprise however selected to take action due to the caliber of traders concerned.
“Individuals like Markus have been constructing huge corporations in lots of, many markets, and that is one thing that is actually thrilling for us as a result of it is so onerous to enter all of the markets and perceive their native dynamics and what folks want,” he stated.
Lightyear presently operates in 25 nations. Nonetheless, with assist from angel traders like Bolt’s Villig, the agency will be capable to launch in one other 5 markets “fairly rapidly,” Sokk stated.
Villig informed CNBC that it may be “difficult to scale a enterprise throughout a number of nations in a closely regulated sector,” including that Europe’s much less developed retail investing market supplies ample alternatives for disruption.
Different Estonian angel traders who’ve beforehand backed Lightyear additionally participated within the funding spherical, together with Smart co-founder Taavet Hinrikus, Checkout.com’s former Chief Know-how Officer Ott Kaukver and Skype founding engineer Jaan Tallinn.
Estonia is broadly thought-about a outstanding tech hub in Europe. The nation is residence to the very best variety of unicorns per capita in Europe, in accordance with the Estonian Investment Agency. In the meantime, Estonia’s e-residency scheme has additionally enabled foreigners to turn into digital residents and launch their corporations within the nation.
The brand new spherical values five-year-old Lightyear at between $200 million and $300 million, considerably larger than its valuation in 2022 when it raised $25 million, in accordance with two folks acquainted with the matter who most popular to stay nameless as the knowledge has not been made public.
Pushing into AI, crypto
Alongside the extra funding, Lightyear can be launching new synthetic intelligence options. AI has been a scorching space of funding for startups following the explosive reputation of generative AI companies like OpenAI’s ChatGPT.
One of many options, known as “Why Did It Transfer,” permits customers to pick out a cut-off date on a inventory chart and see what occurred that day to trigger a bounce or fall in an organization’s share worth. The agency can be utilizing AI to offer “bull” and “bear” theses on shares in addition to quick updates on belongings in their very own portfolios.
“In the long run, you are going to have two fashions” relating to investing, in accordance with Sokk: “Self-driving cash,” the place you ask an AI to attain sure funding objectives, and a “handbook gearbox” strategy of determining completely different methods and approaches by yourself.
Nonetheless, the marketplace for on-line funding merchandise is closely aggressive. Lightyear faces some hefty competitors from each incumbent brokerage companies in addition to extra trendy tech gamers comparable to Robinhood, Revolut and Commerce Republic.
Nonetheless, Sokk insists Lightyear is constructing a differentiated sufficient product to face out from the gang. Whereas rivals like Robinhood revenue from providing dangerous merchandise like crypto and margin buying and selling, Lightyear is concentrated on serving long-term traders, he informed CNBC.
To that finish, Sokk stated Lightyear is planning on rolling out a crypto product of its personal in two months’ time — one which’s “extra targeted on a long-term view.”
