The new Spanish broker without commissions Ninety Nine is already active after two years preparing his debut. The ‘fintech’ has presented its revolutionary method of commissions, “A very common platform service in Europe”, He has advanced that he is already studying the next launch of a premium account and has disclosed the list of large investors who have financed the project, including the Société Générale ‘venture capital’ fund and two other international funds.
May 09, 2020
According to Javier Sanz, founder and CEO of Ninety Nine, the financing of the broker has become “The largest pre-launch seed round in Spain”. Although it has not disclosed the amount it amounts to, it has released the names of its partners. Among them are Breega Capital, the venture capital fund of the French bank Société Générale; Ethos Capital, a Harvard alumni fund, and the Two Culture Capital fund, from investors Scott Hartley and Simon Wagner.
As Bolsamanía announced, they have also financially supported the project Marcial Portal and Michael Goguikian, former Santander executives in Latin America; the entrepreneur Iñaki Berenguer and Citi executives.
Ninety Nine It follows in the footsteps of Robinhood in the United States, ‘fintech’ that has already captured 11 million users in five years. At the moment, the Spanish broker has a waiting list of more than 10,000 users who have provided their information in advance to open an account. Its managers explain that the investor profile they want to target in this first phase -a basic account with the 80 most popular Wall Street stocks, such as Apple, Tesla, Disney or Pepsi, among others- are clients of up to 50,000 euros with no experience in the stock market or who are taking their first steps on the floor.
The firm ensures that an account can be opened without papers in just over three minutes, and that its commissioner model is unique in Spain. The commission is zero for execution, custody, collection of dividends, portfolio transfers, income or withdrawals, standard reports, inactive account or other financial events. But it does have a platform system that includes connectivity costs to the market (sending orders and receiving executions), real-time price dissemination, as well as account support, for one flat monthly rate of 0.042% for accounts less than 10,000 euros, 0.025% between 10,000 and 100,000 euros, and 0.010% from 100,000 euros.
Thus, a client with 50 euros would pay two cents a month, while the cost for an investor with 1,000 euros would be fifty cents. For 50,000 euros, where their maximum customer profile is in phase one, the cost would amount to 15.12 euros per month, and a high net worth of one million euros would have to pay 121 euros every month. The flat rate is calculated on the set of the deposit in account and the portfolio of securities. “It is convenient for a person of 100 euros and competitive for a person of 100,000 euros,” says its founder.
A market study carried out by the partners reveals that “the market is saturated with CFD brokers and traditional brokers” and that there are even brokers who charge up to 600 euros a year for accounts of 1,000 euros.
NO SHORT TERM SPANISH ACTIONS
The Spanish ‘fintech’ wants to simplify operations and make investment in the stock market transparent to the general public. In this sense, its Director of Operations, Adolfo Ximénez, confirms that they are not going to carry out trading activities on their own account – “this way we do not have our interests above the clients” -, nor loan shares and they will not be the white label of no other great entity. “We are creating more than just a business”, trust its managers.
Once they receive the necessary ‘feedback’ from the first clients, they will launch into phase two with a premium account targeting clients with higher wealth and a more sophisticated financial culture. In it, there will be a broader catalog of securities, more investment functionalities and more information for investors. This second phase has no planned release date, although open the door to incorporate ETFs for his simplicity and its similarity with the actions when operating. As for the Spanish shares, rule out their introduction on the platform in the short term. “We are looking for ways to reduce the cost of investing in the stock market for users, that is why we have started with the United States, it is a more efficient market. Spain is one of the most difficult places to lower costs. But, when we can, we will take out the Spanish stock market in the best conditions ”, they advance.
After debuting in Spain, they will replicate the platform in Portugal, Germany, France, Holland and Austria, countries where they already have the license to operate. Among its main competitors on the continent, Sanz acknowledges, are the British Freetrade and the German Trade Republic.