Investment platform Lightyear announces a record year of investment activity on the platform. Seeing nearly 20% month-on-month growth in assets under management (AUM), the appetite for investing – despite another rollercoaster year for the public markets – remains high. In 2023, the company also increased its headcount by 45%, taking the team size to over 50 people, released 8 new products and launched in 2 new countries.
2023 was the year of cash
With the GBP interest rate reaching a 15-year high in September 2023 after 14 consecutive rate rises, customers across the UK looked for ways to make their money work harder with better interest rates. Lightyear saw the average UK customer portfolio made up of 26% uninvested cash over 2023, compared to 18% in 2022. The platform gives interest on all uninvested cash with no limits, tracking the live interest rates and passing value back to customers minus a flat 0.75% fee.
The launch of BlackRock Money Market Funds (MMFs) on Lightyear in August 2023 – returning 5.42% yield for GBP (gross) – increases the percentage of cash or cash-equivalent investments in an average Lightyear customer portfolio (across all 22 countries) to 57%, demonstrating further desire to have idle and accessible cash working harder than average high street bank accounts. (Yield as of 3/1/24, subject to daily fluctuations and fees).
Diversification and hedging against risk was the theme of 2023 for investors on Lightyear
Over half of UK customers (54%) have a mixed portfolio, holding a combination of interest-earning cash with stocks and/or funds. The average UK Lightyear portfolio return in 2023 was 29%, beating the S&P 500 by 5%.
In 2023, the investment platform saw continued interest in technology, with Tesla, Apple and Amazon as the top three most popular stocks on Lightyear across the UK and Europe. The most popular fund in the UK was VUSA (the Vanguard S&P 500), with IUSA (iShares Core S&P 500) and IUKD (iShares UK Dividend) following close behind.
While technology topped the list once again, Lightyear saw increased portfolio diversification across other sectors in 2023 with more customer assets invested in instruments across the consumer cyclical sector (discretionary items consumers can afford to buy more of during a booming economy) and services (finance, insurance and more) than 2022. Another sector that gained interest this year was healthcare, making up part of a portfolio for over 20% of Lightyear customers holding stocks.
New products in 2023
Lightyear continued to release highly requested new products and features at speed including a web platform, exchange-traded commodities, stop orders, money market funds and business investment accounts. The company also added hundreds of new instruments across the year including German stocks and ETFs, the IBEX 35 (Spain’s largest public companies) and UK stocks on the London Stock Exchange. The theme of international expansion from 2022 (which saw Lightyear launch across the 19 Eurozone countries) continued into 2023 with further country expansion into Croatia and Hungary.
Nicole Quinn, Partner at Lightspeed says: “2023 was a challenging year for companies to navigate and despite this, Lightyear had a record year. From rolling out powerful new products and features every couple of weeks, to growing a stellar team of over 50 investment and fintech experts, to consistently driving ~20% month-on-month growth in its assets under management (AUM), the company’s performance and ability to execute has continued to impress.”
Martin Sokk, Co-founder and CEO at Lightyear, adds: “2023 was an amazing year in many ways for Lightyear. As a lean and experienced team, we were able to react incredibly quickly to happenings in the market, bringing new products to customers that help them today – like passing on interest on uninvested cash balances, and our BlackRock Money Market Funds. Our goal last year was to get the platform to as many Europeans as quickly as possible. Our goal this year is to dive deeper on a country specific basis to make sure Lightyear is the go to place to build future wealth and invest.”
As one of the fastest-moving brokerages in Europe, Lightyear has its sights set high for 2024. With continued investment into technology that gives its customers the edge when investing, the firm will be looking at new product lines such as tax-advantaged accounts, expanding its instrument universe to cover more stocks and funds from the many exchanges across Europe and localising the app into new languages.
Lightyear will be exhibiting at Accountex London on 15-16 May 2024 at ExCel London. Join the mailing list to be notified when free registration opens, here.
