Stox, a new stock trading broker has announced that they have raised $8 million in a Series A funding round led by Singulariteam. The funding comes as the broker is near the end of its invitation only beta testing period and expects to launch to UK and European customers in the next few weeks, and enter the US market later this year.
Regulated in Cyprus, the broker differentiates itself from other online firms licensed in the island as they are focusing on investors and not traders. Speaking to Elliot Hool, VP of Marketing and Product at Stox, he explained to Finance Magnates that Stox wants to “make stock trading accessible to all” with the broker creating an “easy to understand demystified platform” to achieve this goal.
The platform uses social features, allowing customers to follow other trader’s portfolios and trades. In addition, Stox has created what Hool called a “marketplace of market knowledge.” In it, account holders can subscribe to follow advanced traders, with trades automatically copying their orders. Upon launching their product, Stox will be one of the few firms offering copy trading for real stocks instead of CFDs, with the marketplace similar to that of Covester which was recently acquired by InteractiveBrokers.
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Speaking with Hool, what was reinforced several times, is that rather than being another social broker or signal marketplace, Stox is committed to attracting long-term investors to their platform. As such, rather than using the CFD model and offering margin trading, customer orders are executed on exchanges. In addition, Hool explained that they don’t plan to market towards day traders, but are pursuing a target audience of customers who want to “take control of the investments” and are looking to make a long-term multi-year commitment towards investing.
Stox has the potential to make online trading effective, accessible and fair without forcing users to sacrifice the quality or legitimacy of the trading environment – Moshe Hogeg
When asked why investors should take an active approach to long-term investing versus passive products like mutual funds and robo-advisory, Hool answered that there are a lot of investors who “want to take the future into their own hands.” As such, he explained that there are a lot of investors that use advisors or have money in mutual funds that don’t feel they have a strong grasp of their performance. Nonetheless, Hool added that although these types of investors have a desire to be more in control of their investments, accessing the market directly is difficult for many with Stox’s goal to be a solution to this problem.
For Singulariteam, the investment is their latest in the financial field, having also backed the team behind Invest.com. A Super Angel fund led by entrepreneur Moshe Hogeg, the firm has focused on investing in startups that they believe have “major disruptive potential”, and include Mobli, Storedot, and YO in their portfolio. With Stox, Hogeg stated, “Stox has the potential to make online trading effective, accessible and fair without forcing users to sacrifice the quality or legitimacy of the trading environment.” He added, “Whenever you can both widen access to new audiences and bolster the experience for those who are already using similar products, the potential is enormous.”