Swedish Startup Space

Sprinklebit raises $10 million from GTC and sets its sights on IPO

Written by on January 28, 2016

Alexander Wallin raises millions for his trading platform and talks about the ultimate goal for his company.

“We’re fueling the Ferrari now”, Alexander Wallin says to Breakit from his home in San Diego, California.

He’s has been working on Sprinklebit for the last five years. He describes the service as a social trading platform, where smarter investments are made through crowdsourcing and digital technology.

The platform can be integrated with Facebook, and lets rookies and professional traders discuss stocks and investment opportunities. The users can also follow in the slipstream of other successful investors and invest real money.

“When you’re new to the platform you get virtual money to play around with, but you can transition to actual money whenever you feel ready”, Alexander Wallin says and continues:

“it’s built on a voting model where you can – quite accurately – analyze which stocks have moved up or down. There’s also an integrated educational part where beginners can learn everything they need to know about trading. The app tells you at what price you should sell or buy a different stocks, you can get notifications when traders you follow sell or buy, and you can automatically follow the investors you believe in. It’s an incredibly powerful platform”, he says.

Alexander Wallin left Sweden after his conscription service in the army. He founded Sprinklebit after studying at UCSB and Harvard. However, the development has taken a long time, mostly because of the strict regulation of the stock market and financial services.

“I don’t know how tough the Swedish SEC is, but the requirements over here are incredibly tough. It took us three years to build the foundation for the app, but we could start adding functionality as soon as that was done. We released the iOS-version in January this year”, he says.

During the first few years, the company was backed by angel investors. The company has now decided to start growing and has raised its Series A-round of $10 million.

The money comes from the venture capital firm GTC.

“It’s a great deal for us. They let us control everything. They’ve made it perfectly clear that we don’t have to stress about getting them a good exit within three years. We’re building this to make a great product and take the company public”, Alexander Wallin says.

The money will be used primarily to grow the user base, which is at about 10.000 users at this time.

“This is our time to shine. We’re going to keep building and release an Android-version later this year. But most of the money will go to spreading the word and get more users”, he says.

The challenge of finding users does, however, not worry Alexander Wallin the slightest.

“What’s great about this line of business is that everyone is looking for an edge. If you look at our 2015 review – where 80 percent of the users are beginners – the median investment growth for our users landed at 35 percent for the whole year. That’s an incredible number, and just by that we show people that our service gives them the edge they’re looking for. it doesn’t matter if you’ve just started or traded for 20 years”, he says.

However, everything doesn’t revolve around making money for the customers. Sprinklebits is based on a freemium model. You can download and use the app for free, but you have to pay for the “stock market school” and analysis.

If you, in the end choose to start trading through the platform, Sprinklebits takes $8 per trade, or $5 if your a premium member.

“It’s really a quite simple business model”, Alexander Wallin says.

But going public is your final goal then?

“Yes, well, it’s more of a dream right now. But think about it like this: You’re running a platform for investors. Imagine if you could tell your users: ‘Tomorrow you will be able to invest in Sprinklebit when we go public.’ That’s the ultimate goal.”

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