About a year ago, Mihkel & I discussed at a coffee table how broken the investment world is - people in Europe don't have good access to global markets, it's often incredibly expensive and requires quite a lot of specialised knowledge to actually do it. We kept thinking that there has to be a better way!

Fast forward and we’ve raised investment, hired a talented team, received our regulatory permission and launched our first product to the UK market.

That’s quite a lot to happen in a short space of time, and we’re still pretty new to the UK fintech scene, so I wanted to share a little bit about our story and what’s happened for us to get here.

TL;DR: Europe is missing one platform that gives you access to the world’s market, delivers a reliable low-cost solution and is able to give you the information you need for investing.

The problem

When Mihkel & I first met up after leaving Wise, it wasn’t about starting a business together. We actually just ended up having a bit of a rant about investing! Turns out we were coming up against the same obstacles.

Don’t get me wrong, there are tons of investment firms out there. Unfortunately, traditional banks that serve the majority of the market are not paying any attention to the problem in hand. Some of the newer platforms out there are doing a better job, but we see three (big) things as the main problems:

Expensive and opaque fee structures

• Fees are expensive and often not transparent. There are so many varying components and everybody has a different approach when it comes to charging customers. I’m talking about transaction fees, foreign exchange fees, monthly custody fees, spreads, instrument management fees and more. It seems that we were always getting the short stick here.

Limited access to markets

• Everybody is hyper-local. This problem is two-fold. First, there aren’t really any solutions available that are actually usable across the European continent. Second, local brokers often offer bad access to the global markets.

Limited information and education

• Most platforms are execution venues. Little information is available to the customer to really understand the market, portfolio or instruments they are interacting with. Today, we need to use multiple services to get a better all-round understanding about investing.

The first two (price and access) are more technical but the last one is a softer and more personal problem which, in turn, makes it more difficult to solve. How can people make the right decisions based on their risk, ambition or views in life? Only once you’ve solved all three will you be able to help people to start investing comfortably.

The team

To make the above possible, we need the best of the best team. We’ve been incredibly lucky to have a group of people who have great experience from businesses operating in very similar spaces. The knowledge and passion from our early employees, who collectively have worked at the likes of Wise, Revolut, Robinhood and Pipedrive, is something that’s quite special.

I did a short Twitter thread that gives you a little bit of insight into why they all individually decided to join Lightyear. Give it a read!

The investment

We are joined by a group of passionate investors who believe in our mission to bring investing into the new age. Our pre-seed funding round was led by Taavet Hinrikus, co-founder of Wise and Sten Tamkivi, co-founder of Teleport, alongside Jaan Tallinn, the co-founder of Skype.

We welcomed a great group of angel investors with a keen interest in the investment world, including Ott Kaukver from checkout.com, Wander Rutgers from Robinhood UK and Kaarel Kotkas from Veriff. Our other angel investors include Hardi Meybaum, Karl Merisalu, Henrik Bohman and Joe Cross.

More recently, we closed an $8.5M additional round of funding, taking the total raised pre-launch to $10M. This new round was led by Mosaic Ventures alongside our existing investors Taavet+Sten and Metaplanet. We're super happy to also be joined by new angel investors including early Monzo backer Eileen Burbidge, Harsh Sinha, the CTO at Wise and Taavi Tamkivi, the CEO at Salv.

Are we there yet?

Short answer is no. But, we’re getting there! We’re focused on building a scalable platform that can serve all markets for everybody in Europe. Today, we’re building a Minimum Viable Product (MVP) that allows us to start with a service for those in the UK to invest in the US markets with no fees in a simple way.

This is just our starting point, and it will enable us to start learning from customers in more detail so we can build a product that’s tailored to exactly what they need. From here, we’ll start adding additional features, new markets and instruments and focus on expanding into all European countries.

In summary

The last year has been spent solidifying that this problem is actually bigger than we first thought. Chewing through the ancient infrastructures and access problems, alongside a very prominent old style of thinking.

In voicing our mission and what we want to change, so many people have reached out to share their bad experiences with the investment world, which has only built our conviction further.

In solving our own problems, we’re now fully aware that there are so many people with the same problems who need a new solution. Speak up and share your views with us. Your experiences and opinions matter - we’re building the future of investing together.

Start investing on Lightyear today. Download the app now 🚀

Remember, when you invest your capital is at risk.

By Martin Sokk

Martin is a lifelong product builder in the finance world having joined Wise as the first product person. Martin began working with Mihkel on the idea for Lightyear in the summer of 2020. After meeting for a coffee to catch up, they both quickly realised that they shared a strong opinion: investing in Europe is still broken.