Robinhood Rival Gotrade Raises $7 million as it Aims for more Upgrades and Expansion

Gotrade, a startup that focuses on fractional trading, has announced that it has raised $7 million in seed funding by LocalGlobe and others including Y Combinator, Social Leverage, etc.

Many traders around the world want to enter into the US stock markets to trade stocks like Amazon and FaceBook but the barriers of entry for them are very large. First, they need to put up with high brokerage fees and commissions that can go up to $25 which basically rules out trading for many in the developing countries. Also, the cost of a single share of any major American company is so high that not many can afford them.

Gotrade aims to resolve both these problems by charging just $1. Also, it has fractional trading which means that even a small fraction of a share can be bought or sold by the trader and this makes it very accessible for traders around the world.

Rohit Mulani, the CEO of the company said, “When I was 18, I actually looked to get access in Singapore, and banks were charging $30 per trade. Effectively, the market taught me that I could not get into the market. Fast forward ten years, I decided to look into it again, and the banks were still charging $25 a trade,” he said. “On top of that, their user interfaces were something I didn’t want to look at. So we decided to build a brokerage platform where anyone can get access.”

“Fractional trading actually came a bit later,” he added. “That was the real MVP for us because fractional really make investing accessible to anyone globally since all you need is one dollar.”

The company says that its platform can be used in around 150 countries and it is still in invite-only mode. It currently has over 100,000 signups though traders in the US cannot use it due to existing regulations. In this respect, it may not be a rival to Robinhood as yet but it is more likely to rival platforms like Saxo Bank and Interactive Brokers.

The platform does not charge a commission but tries to make money by the currency rates for the deposits that are done on the platform and also by the interest that they get for the unused balances that are left in the platform by traders. The app plans to launch a premium subscription service shortly and also plans to add more features and upgrades that would be attractive to the younger generation.