According to the AMF, there were more than 400,000 active customers in France on the platforms of new brokers in the third quarter of 2021, compared to less than 100,000 two years earlier.
In total, Bitpanda, Trade Republic, Bux Zero and Scalable Capital have at least 7 million users in Europe.
The four new brokers offer programmed investments and the purchase of fractional shares, but none offer PEAs.
While the equity and crypto markets have been trending lower overall since the start of 2022, commission-free trading apps are directly impacted by these disruptions. The fall in the markets leads to a drop in investor activity and consequently points to the weaknesses of their economic models, which are too dependent on transaction volumes. The most striking example of this turnaround is the pioneer player in this business segment: the American investment platform Robinhood, whose user engagement has fallen sharply in recent months (-43% monthly active investors in the space of five quarters).
On this side of the Atlantic, neo-brokers Bitpanda, Bux, Trade Republic and Scalable Capital have also seen a slowdown in trading. Their teams must redouble their efforts, not only to retain their existing customers but also to attract new ones. All are in fact already in a phase of geographic expansion – unlike these European players, who began their internationalization early in their growth, their American counterparts are only thinking about it now, faced with a deceleration in their domestic market. Thus, Robinhood wants to expand internationally via its future crypto wallet and Public.com announced the opening of new markets in 2023.
France, a market to clear
Created between 2014 and 2015, these four neo-brokers all settled in France as part of the freedom to provide services, starting with the Austrian Bitpanda, launched during the first confinement in May 2020. The Dutch solution Bux followed a few months later, in July. Then the Germans Trade Republic and Scalable Capital joined them respectively in early 2021 and in March 2022. Freetrade and Shares, competing applications launched in the United Kingdom, have also expressed their desire to position themselves in France. And for good reason, France is both a large market – its population represented 15% of that of the European Union at the beginning of 2021 according to INED – and devoid of direct competitors on the same model.
