Stock trading startup
8 Securities goes bullish with $25m funding

Mikaal Abdulla, founder of stock trading startup 8 Securities, is feeling bullish today after pocketing his biggest-ever round of funding.

The US$25 million invested is the first time in four years that Abdulla has taken funding for his fledgling fintech empire.

“Our last round was in the summer of 2014. We used that capital to develop Chloe and Tradeflix,” he told Tech in Asia, referencing the startup’s robo-advisor, which launched in 2016, and the commission-free stock trading service that rolled out last October.

“We decided to raise a larger round now in order to invest much more in marketing and to expand our software development team. We have – to date – not invested materially in marketing, but given the strong traction we want to press the accelerator now,” he added.

Unlike US-based trading app Robinhood, 8 Securities is focusing on Asia. Most of its users are in its home city of Hong Kong as well as mainland China and Singapore.

“We do not anticipate entering any new markets in 2018, but 2019 will be active,” said Abdulla. “Our priority is Southeast Asia and China.”

Fintech meets finance titan
The funding comes from Japan’s biggest investment bank, Nomura, via its company-gobbling Nomura Asset Management wing. The finance giant’s US$25 million buys it a minority stake in 8 Securities’ main business, and a controlling stake in the startup’s Japan division.

This comes days after Nomura partnered with Line in a bid to allow users of the messaging app to buy and sell stocks. That service will be rolled out later in the year in Japan.

8 Securities is part of a new wave of fintech startups that are challenging banks and brokerages as well as older sites like E-Trade.

Both Abdulla and his business partner, co-founder Mathias Helleu, are former executives at E-Trade. Abdulla worked there for 12 years before establishing 8 Securities in 2010. It launched to the public in 2012.

“Our customer assets have doubled year over year and our turnover has grown by 190 percent over the same period,” he said, citing data from the end of last month.

While the founder isn’t disclosing any absolute figures for the startup or whether it’s turning a profit, the size of the market it’s going after is undoubtedly massive. E-Trade, for example, brokered a record US$12.2 billion in 2017, helping it hit US$2.4 billion in revenue and US$614 million in profit.

If you picture retail investors as old people building a portfolio to nurse them through retirement, then 8 Securities’ young user base may come as a surprise. The average user of its AI advisor is 27, while for spinoff app Tradeflix it’s 30. It’s a different story at the 92-year-old institution that’s now the startup’s BFF.

“The average age of Nomura’s customers is between 60 to 80,” Abdulla pointed out. “But Nomura is committed to launching mobile products and services for millennials and see us as a strategic partner to do that.”