Alec Beasley, Co-founder and CEO, Investa
Today we're meeting Alec, Co-founder and CEO at Investa. They specialise in making options trading accessible to UK retail investors through the UK's first zero-commission options trading app.
Over to you Alec - my questions are in bold:
Who are you and what's your background?
I previously worked on the Equity Derivatives Sales desk at Citi, where 90% of my role involved facilitating the trading of options for professional clients, with a primary focus on hedge funds. All day long, I was buying and selling options, and I loved my job. However, I wanted to trade them personally, as a retail investor, but was unable to do so.
I knew something needed to be done about that, so I quit my job with the mission of making options trading accessible for on-the-go and at-home traders. I knew that to do that, I would have to launch the UK's first zero-commission options trading app. We officially started Investa from my parents' garage, but we have long since moved out of there as the team has grown.
What is your job title and what are your general responsibilities?
I am the co-founder and CEO of Investa.
Honestly, I do a bit of everything; you have to wear so many hats in the early stages of a start-up. I've raised £3 million in funding for the business to date and have led or been the only person in the pitch. I've probably interviewed at least 300 candidates during the first stage of the process.
My co-founder (Ross Lynch) and I have personally moved the contents of our offices four times by renting and driving a van. Ross and I are also customer support staff at the moment! There are, of course, many other aspects, such as line management responsibility with eight full-time team members currently, investor and customer relations and many more. However, the main part of my role as CEO is to drive the vision and strategic direction of both the investment platform and the business itself.
Can you give us an overview of your business?
Investa is making the options market accessible to retail investors for the first time in the UK. We are the first platform where investors can buy both stocks and options without paying commission, just one flat FX fee. Options have been extremely popular in the US, with 36% of retail investors under 35 having traded an option.
Over here, it's more like 1%. By making options accessible, it'll be the first time UK retail investors can hedge (protect) their investments. Retail investors here have been pushed into other derivatives such as spread bets and CFDs, but it's Investa's view that options are a far superior product for retail investors to trade. When buying a Call or Put through our platform, the investor will pay the premium of the option. The loss is fixed, known at inception and limited to the amount paid for the option, which is very contrasting to CFDs and spread bets.
On the upside, however, by risking one, they still have the potential to make two, three, five, 10 or even more. So, investors can still get the leverage they want but trade it in a manner where the risk of loss isn't unlimited.
Tell us how you are funded?
To date, we've raised about £3 million, and this has come from over 800 investors. We've raised funds both directly from angel investors and through Crowdcube. Our campaign is currently live.
(Risk disclaimer: Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment, and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more.)
Who are your target customers? What's your revenue model?
Our product isn't targeted at novice investors; it's not intended for those who have never traded shares before, for example. We target the slightly more sophisticated retail investor, who has likely traded CFDs or spread bets before, as well as those with larger risk appetites.
The largest driver of revenue in the early days, currently, and in the future will be FX conversion fees, which are transaction-based. Over time, as assets grow on the platform, interest will be a larger portion of our revenue, alongside memberships (once they are introduced). The memberships are optional, of course, and customers will still be able to trade both stocks and options without commission, even if they don't have a membership.
If you had a magic wand, what one thing would you change in the banking and/or FinTech sector?
The amount of red tape. It's hindering innovation and growth.
What is your message for the larger players in the Financial Services marketplace?
Keep an eye out for Investa!
Where do you get your Financial Services/FinTech industry news from?
Financial Times, Sifted, Forbes and FF News.
Can you list some people you rate from the FinTech and/or Financial Services sector that we should be following on LinkedIn, and why?
There are so many I could list, but I'm highlighting Tom below, given our shared backgrounds in the options space and our experience starting online options brokerage platforms.
Tom Sosnoff: He started out as an options trader, then co-founded an online options brokerage called Thinkorswim, which was sold for $750 million and then co-founded tastytrade, which turned into an online futures/options brokerage, which was sold for $1 billion to IG.
Founding a successful brokerage not once, but twice, is nothing short of exceptional.
What FinTech services (and/or apps) do you personally use?
Revolut is a fantastic product, and I have been using its FX services for an extremely long time now.
What's the best new FinTech product or service you've seen recently?
Adclear: Automating financial promotion compliance, in seconds. I think its product is brilliant and there's a real gap in the market for this!
Finally, let's talk predictions. What trends do you think are going to define the next few years in the FinTech sector?
I believe there will be an AI-led market crash soon, which will likely lead to AI-related FinTechs and probably the wider market struggling to raise new rounds. We saw the same thing with the internet and the dot-com bubble; now almost every person in a developed country uses the internet daily.
Today, the world's largest companies by market cap are overwhelmingly tech firms. It was the same with crypto: a massive bubble, which burst; and now it's mainstream again, with prices far higher than they previously were and over five million crypto investors in the UK. So, I expect the same will happen with AI.
When it does crash, everyone will say it was a bubble, moods will be sour, but then adoption will continue to increase, and AI stocks will be the highest-flying, with market caps of companies like NVIDIA eventually reaching $10 trillion. This is definitely not financial advice, just my thoughts!
Thank you Alec! Connect with Alec on LinkedIn and read more about Investa at their website www.investa.co.uk.
