Robinhood challenger Freetrade, which has raised millions for its fee-free trading app, acknowledged a high attrition rate after 22 staff departed in 2019

Freetrade

Freetrade

• UK finance startup Freetrade, a competitor to Robinhood, has acknowledged a high rate of attrition after Business Insider learned that 22 staff departed in 2019.
• The company peaked at 53 staff in 2019.
• The departures were down to a mix of resignations and firings, including its five-strong design team in the second half of 2019.
• Freetrade has raised a total of $20.4 million from venture capital and crowdfunding backers for its fee-free trading app.
• "Building a company is a journey," Freetrade CEO Adam Dodds said in response. "You need to get the best people you can, in the right positions, which changes over time. When you grow as fast as we have in the past year, that change process is greatly accelerated."
• Click here for more BI Prime stories.

Freetrade, a fee-free trading startup to rival Robinhood, has acknowledged a high staff attrition rate after Business Insider learned that 22 staff departed in 2019.

Freetrade is headquartered in London and has raised $20.4 million from venture capital backers such as Draper Esprit and through crowdfunding. It says it has 70,000 users for its trading app.

The company acknowledged the departures to Business Insider and said the turnover was a "higher rate of attrition than we strive for." The company said it had a maximum of 53 staff in 2019.

CEO Adam Dodds added that some of the departing employees had been at the startup for less than a month.

"Building a company is a journey. You need to get the best people you can, in the right positions, which changes over time. When you grow as fast as we have in the past year, that change process is greatly accelerated," Dodds said in a statement.

"The hard truth is that if we didn't have any staff turnover we'd be dead as a company," he added. "Equally, this is a higher rate of attrition than we strive for and we will continue to make improving our people processes a top priority as we continue to grow."

Six former employees speaking to Business Insider said the firm's rapid growth and blunt style of management had contributed to staff turnover.

The company lost its five-strong design team in the second half of 2019. Its head of design, James Storer, resigned in July. Two additional employees resigned from the team in the following months before the remaining two were fired, according to an internal email seen by Business Insider.

The email, sent to the remaining Freetrade staff, states that the design department had been in a state of "flux" and that the exiting team members were not "culturally aligned."

The company confirmed the design team departures.

Another high-profile exit was Andre Mohamed, one of the company's cofounders.

According to filings with the UK's Companies House, Mohamed left the company in October 2018. His departure was first reported by TechCrunch, though the reasons were unclear. Mohamed did not return a request for comment.

Former employees say working at Freetrade wasn't easy

Former employees said, amid the layoffs, that working at a fast-growing startup wasn't always easy.

According to messages seen by Business Insider, chief marketing officer Viktor Nebehaj referred to "significant burn rate." Ex-employees perceived this to be a reference to high staff turnover, and told Business Insider this contributed to a sense of unease.

Freetrade Slack

Freetrade's CMO Viktor references the company's high turnover rate and indicates that missing tweets could be an issue for employees.

Nebehaj did not directly address the messages, but said in a statement: "I was one of the earliest employees at Google Europe and saw what it takes to build a high-performing tech company.

"One of the most important things for me is candour, especially in the workplace. It is a core value at Freetrade, and it means both being truthful as well as caring personally. It's Marmite for some people."

The former staff said Freetrade did not have an office manager or HR professional to manage employee grievances or concerns.

Personnel difficulties, the people added, were compounded by the company's adoption of "radical candour", a style of extremely honest feedback promoted by former Google executive Kim Scott.

"It's part of the 'culture' at Freetrade to value direct feedback," one former employee told Business Insider. "But what that translated to was that if you disagreed with something you would be shot down."

The company is currently advertising for a head of people role on its website. Freetrade confirmed it was actively looking for a head of people, alongside other dedicated HR staff.

Issues around layoffs and growth culture are not unique to Freetrade. Europe's burgeoning fintech scene has led to an influx of capital into the sector, with finance startups raising $25 billion since 2015, per Atomico data.

"There's always the risk that too much capital could lead to more aggressive growth and therefore less stringent oversight or governance, in all companies, not just fintechs," said Eileen Burbidge, partner at Passion Capital and a special envoy for fintech in the UK government. "Culture is already bedded in and funding can expose or magnify both positive and negative traits."

NOW WATCH: Why food tastes different on planes