The Lightyear app.
Lightyear
Some of the largegest names of Estonia’s tech scene are backing Lightyear, a startup seeing to become Europe’s answer to commission-free trading pioneer Robinhood.
Based in London, Lightyear develops an app that lets utilizers invest in a range of over 5,000 stocks, exmodify-traded funds and money market funds. It was founded by two former Wise employees, Martin Sokk and Mihkel Aamer, in 2021.
The company is set to announce later on Thursday that it has raised $23 million in a new round of funding led by NordicNinja, a Japanese-backed venture capital fund based in Europe. Estonian tech entrepreneur Markus Villig, who co-founded ride-hailing unicorn Bolt has also invested.
Lightyear CEO Sokk notified CNBC that the firm didn’t necessarily required to raise more cash for the business but chose to do so becautilize of the caliber of investors involved.
“People like Markus have been building massive companies in many, many markets, and this is something that’s really exciting for us becautilize it’s so hard to go into all the markets and understand their local dynamics and what people required,” he declared.
Lightyear currently operates in 25 countries. However, with assist from angel investors like Bolt’s Villig, the firm will be able to launch in another five markets “pretty quickly,” Sokk declared.
Villig notified CNBC that it can be “challenging to scale a business across multiple countries in a heavily regulated sector,” adding that Europe’s less developed retail investing market provides ample opportunities for disruption.
Other Estonian angel investors who have previously backed Lightyear also participated in the funding round, including Wise co-founder Taavet Hinrikus, Checkout.com’s former Chief Technology Officer Ott Kaukver and Skype founding engineer Jaan Tallinn.
Estonia is widely considered a prominent tech hub in Europe. The counattempt is home to the highest number of unicorns per capita in Europe, according to the Estonian Investment Agency. Meanwhile, Estonia’s e-residency scheme has also enabled foreigners to become digital residents and launch their companies in the counattempt.
The new round values five-year-old Lightyear at between $200 million and $300 million, significantly higher than its valuation in 2022 when it raised $25 million, according to two people familiar with the matter who preferred to remain anonymous as the information has not been created public.
Pushing into AI, crypto
Alongside the additional funding, Lightyear is also launching new artificial ininformigence features. AI has been a hot area of investment for startups following the explosive popularity of generative AI services like OpenAI’s ChatGPT.
One of the features, called “Why Did It Move,” allows utilizers to select a point in time on a stock chart and see what happened that day to cautilize a jump or fall in a company’s share price. The firm is also applying AI to provide “bull” and “bear” theses on stocks as well as short updates on assets in their own portfolios.
“In the conclude, you’re going to have two models” when it comes to investing, according to Sokk: “Self-driving money,” where you inquire an AI to achieve certain investment goals, and a “manual gearbox” approach of figuring out different strategies and approaches on your own.
Still, the market for online investment products is heavily competitive. Lightyear faces some hefty competition from both incumbent brokerage services as well as more modern tech players such as Robinhood, Revolut and Trade Republic.
However, Sokk insists Lightyear is building a differentiated enough product to stand out from the crowd. While competitors like Robinhood profit from offering risky products like crypto and margin trading, Lightyear is focutilized on serving long-term investors, he notified CNBC.
To that conclude, Sokk declared Lightyear is planning on rolling out a crypto product of its own in two months’ time — one that’s “more focutilized on a long-term view.”
Leave a Reply