Tiger Global-backed Stakeshop to launch $2 brokerage service in Australia

Photo: Michael Förtsch / Unsplash

Stakeshop Pty Ltd, an online stock broker backed by tech investment giant Tiger Global, said on Monday it will launch a A$3 ($2) brokerage service in Australia, the country’s cheapest.

The launch is a direct challenge to No. 1 lender Commonwealth Bank of Australia’s subsidiary CommSec, the country’s largest online and mobile broker, and other large competitors that have dominated the local market for years.

“I don’t think there’s been material change in the industry since brokerage went electronic in the late ’90s and early 2000s,” said Matt Leibowitz, Stakeshop’s Sydney-based founder and chief executive. “So I think 25 years on, this is a big moment.”

Operating as Stake since 2017, the company is known among a growing number of investors in Australia and New Zealand primarily as a commission-free retail broker for U.S.-listed stocks.

For that service, Stake’s platform operates in U.S. dollars and traders are charged 0.7% on fund transfers between Australian and U.S. dollars.

It has about 360,000 customers, and trading on the app has grown 100-fold to over $1 billion per month since its launch, Leibowitz said.

The brokerage for Australian-listed stocks will be powered by Finclear, a broker-dealer 16% owned by Magellan Financial Group.

Trading in stocks listed on the local ASX Ltd exchange will be CHESS-sponsored, meaning that it will be under the person’s own name, not a separate legal entity’s name, as is commonly done by low-cost brokers seeking to reduce costs.

After a commission-free period until year-end, Stake’s commissions of A$3 a trade will compare to CommSec’s tiered fees of A$10 to $29.95 for each trade worth up to A$1,000 to A$25,000, respectively.

“I think this will accelerate us towards the top,” Leibowitz said. “We’ll hopefully be banging down the door of number one, that would be the goal.”

CommSec holds 5.4% market share in terms of the traded value of Australian stocks as of June 30, according to Commonwealth Bank’s annual report. But its share of the narrower online brokerage market is estimated to be close to 40%, with the retail broker opening over 550,000 client accounts in fiscal 2021.

In June, New York-based Tiger Global led a A$40 million Series A equity-raising for Stake, which with 75 staff also operates in Britain and Brazil.

Reuters

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.