A trading app called Bux that is designed for the younger generation launched a crowdfunding round on Seedrs after finishing a €10.6m (£8m) series C round from institutional investors.
The company, which intends to be a “millennial financial brand,” wants to develop its current trading community while also launching a cryptocurrency trading app and a stock trading app next year.
Crowdfunders who enter the Seedrs round will be allowed to invest in exactly the same terms as the institutional investors, who include the Holtzbrinck Ventures of Germany and the Velocity Capital of the Netherlands and angel investors Binckbank founder Thierry Schaap and Arthur Kosten (formerly of Booking.com).
“We are very actively engaging with our user community,” stated Nick Bortot, the Bux founder. “They said: ‘We are the people who are helping you to become big, so why don’t you allow us to invest in your company?’”
Bux currently operates a model where users are able to trade “contracts for difference” or CFDs. They reflect the price of the asset underlying them, for example, a stock. However, the owner of the CFD does not actually own the stock.
CFDs have many advantages, including reducing the commission which brokers can charge. They also enable investors to use leverage — or borrowed money — which can improve returns, but also increase losses on a poor trade.
“We do not see CFDs as a leveraged product. You can offer it with leverage but we use them because they allow people to trade fractionally,” Bortot said. “We’re targeting young people who often don’t have the means to invest a couple of thousands of pounds or euros. The want to invest £50, or £100.”
Bux runs across eight European countries and has partnered with broker Ayondo Markets in the United Kingdom to get licensing from the Financial Conduct Authority.
In the United Kingdom, the app has 200,000 users who can begin using virtual money and advance to real money. 85,000 users currently have a real-money account.