Martin and Mihkel: The Wise Guys changing European Brokerage
We’ve had an awesome time supporting Lightyear over the last year at RiskSave.
Time to spend some time with the Founders!
The always engaging and always building Martin Sokk (CEO) and Mihkel Aamer (CTO)
1. Tell us about yourself.
MS - I’m Martin, CEO and co-founder at Lightyear. I’ve been building products my whole life, mainly in the financial world, and started Lightyear off the back of building TransferWise (now Wise). Before Wise, I worked at Swedbank.
MA - I’m Mihkel, CTO and co-founder. I’ve been in the financial technology world for pretty much my whole career. I met Martin whilst I was at Wise, building the engineering team, and before that I was at UBS.
2. Tell us about Lightyear
MS - Lightyear is an investment platform, offering a simple and approachable way to invest your money globally without unnecessary barriers or fees. Right now, Europe doesn’t have a good investing solution for everyone, in every country — we aim to close that geographical gap as well as build a product that works fairly for both seasoned investors and people just getting started.
MA - There are three main pillars to how we plan to achieve this. Firstly, we don’t charge fees. There are no account fees or management fees, no limits on how many ‘free’ trades you get and we don’t upsell on FX fees. Our whole proposition centres around access and not limiting people with barriers and fees. Secondly, we offer multi-currency accounts, which allows customers to keep money in different currencies. While we don’t have transaction fees, we do charge a small amount on FX. On a more subjective level, we’re focusing more on education and data — building the tools to empower retail investors with access to professional-grade research, data and information.
3. You are focussed on the UK right now before launching in Europe - Where next?
MS - The UK is our first market. For us, the regulatory system here is one of the most dynamic and fintech friendly in the world, there is also an appetite for investment platforms here and a few existing players already doing a good job of challenging the incumbents. It felt like a very natural first step for us to start here in the UK.
MA - The European market is very fragmented and most investment apps are single market products. When you look at Europe’s different markets, there are nuances in tax structures, various different currencies and of course different languages and cultures. We’re building a global platform that works in local markets. One of the main reasons there is no good solution for the European market at the moment is because nobody understands how to operate across these different markets in a way that makes both financial and logical sense for retail investors. Our first European launch will be Estonia, with more countries following shortly after.
4. How useful was the AR regime as a stepping stone to the mass-market?
MS - The AR regime has been a good first stepping stone to getting us live in the market. We wanted to launch in the UK first, and this was a natural first step for us before looking to get direct authorisation ourselves.
MA - The regime means we were able to launch our product and help customers save time and money on their investments, while in parallel building out new features, working on expansions and bettering our platform every step of the way.
5. How have you used technology to create value?
MS - Investing has long worked through tech solutions, but in Europe, we’re far behind the likes of the United States. There’s no one platform that’s nailed expanding to many different markets and creating a frictionless, affordable solution for every retail investor. We’re building a mobile-first product that combines the best parts of what some other providers do and takes the user experience to a whole new level.
MA - To make that happen, we’re building a world class engineering team with people who have spent years building brokerages at fintechs and global incumbents. We’re also leveraging technical capabilities from some great partners to help us move fast. Our customers have access to multi-currency accounts through Currencycloud; we’ve partnered with TrueLayer to offer instant account funding; and we use Alpaca broker’s API to offer stock trading.
6. Are the new stock platforms actually different? Etrade was doing similar things decades ago.
MS - Well, personally we are both investors ourselves, and when we met up after Wise 18 months ago, we started chatting about the various platforms we use - this quickly led us to the realisation that we use many different ones for many different things. We were essentially just hacking our way around different products to get the best opportunities with the lowest fees, but we did this using our knowledge of both investments and tech. For people with less first-hand knowledge, or without the time to self-teach, it’s not doable. The investment sector has essentially created an inequality where if you have specialist knowledge or more money, you get access to a better service than those that don’t.
MA - Our initial chat about investment months ago really hit home that there was a big problem here. We have definitely seen growth in a positive direction when it comes to solving some of these issues, with new platforms in countries like the UK and Germany — but they’re unavailable to most of Europe’s population. By and large, there still isn’t anything that solves the problems and frustrations that we were feeling: global access, fair fees and the complicated nature of the products all together in one place. There are so many countries in Europe with no good investment product open to them, and whilst we’re at the very start of our journey, it’s our mission to fix that.
7. What are your favourite FinTech innovations?
MS - Innovations take many different faces. Today I’m fascinated with how neo-banks and financial upstarts are redefining the way how people interact with financial products. We are finally getting to the place where the power of the internet is creating frictionless access to finances. In the recent past I believe the creation of index ETFs has been an incredibly beneficial tool for investors.
MA - When we look at Fintech in general it started off with transforming simpler services like payments and current accounts, and is now moving to tackle more complicated and sophisticated areas of financial services. I am excited about how technology in the coming years will transform complex pieces of the financial industry and infrastructure like international securities business and make it easily accessible for consumers.