Trade Republic’s €1 Trading Model: Brilliant Disruption or Ticking Time Bomb?
How Trade Republic attracted 4 million users with ultra-low trading fees and why the €1 model might not be sustainable
Let’s rewind to 2015.
Investing still felt like something your uncle with a three-piece suit and a Commerzbank login did on weekends. Mobile apps? Ugly. Fees? Brutal. User experience? Early Excel (≠ absolutely brilliant).
Then came our three protagonists Thomas, Christian, and Marco — a physicist, an ex-banker, and an engineer — and they had a different idea.
What if buying a stock was as simple as ordering a pizza?
They called it Trade Republic.
Ten years later, they’re a full bank with over four million users, a €5 billion valuation, and a product portfolio that makes most traditional banks look like fax museums.
But now, the EU has passed a law that could take out the core of their business.
Here’s how Trade Republic reinvented investing — and why that €1 trade might soon cost more.
Three guys, one idea, no suits
It started in a startup incubator in Munich. Thomas Pischke, fresh out of his physics degree, gets a spot in LMU’s elite founder program. Previous alumni: Flixbus, Foodora, Freeletics.
He wants to build a stock trading app. But he’s more backend than boardroom.
So he calls Christian Hecker, an old friend and former Merrill Lynch banker. They bring in Marco Cancellieri, a software guy with startup blood. The team is set.
They get a room, drink too much coffee, and start building.
Meanwhile, in the US, Robinhood is making waves — commission-free trading, mobile-first, exploding user base.
The German trio is hooked. Inspired, but not copying.
In 2015, they launch their own vision of a neo-broker. Same idea. Different continent.
One euro per trade. That’s it.
Too good to be true?
At the time, most banks in Germany charged €10–15 per trade. Trade Republic’s €1 model was either brilliant or insane.
The question was: how do they make money?
The answer: Payment for Order Flow.
Here’s the short version:
When a user buys Apple stock, Trade Republic doesn’t execute the trade itself. It routes it to a partner like Lang & Schwarz — a so-called market maker. These guys match buy and sell orders and earn on the spread (the tiny gap between buying and selling prices).
Lang & Schwarz then shares part of that profit with Trade Republic.
That kickback? It’s how they kept user fees at €1.
Add in some ETF provider fees and a steady stream of new users, and the model worked.
At least for a while.
The mission? Close the pension gap
From day one, Trade Republic wasn’t just selling stocks. They were selling purpose.
Specifically: the Rentenlücke.
In plain English: Europe’s growing pension gap. A structural financial black hole waiting for Gen Z and Millennials at the end of their careers.
CEO Christian Hecker dropped the word in every interview. It became the company’s unofficial tagline.
The logic was simple: if the government can’t save your retirement, you better do it yourself. And Trade Republic would be your tool of choice.
Savings plans. ETFs. Automatic investing. Easy UI. Low fees.
By the end of 2019, they had over 150,000 users. Most of them first-time investors.
COVID, Reddit, and the first real stress test
Then came 2020. COVID hits. Lockdowns start. People are bored, stuck at home, and not spending money.
And suddenly, retail investing takes off.
By the end of the year, Trade Republic has 600,000 users.
Then January 2021 hits. GameStop goes nuclear. Reddit loses its mind. Hedge funds panic.
Trade Republic users pile in. The servers sweat. The system freezes. Lang & Schwarz halts trading.
Suddenly, the hype turns into backlash.
The app gets flooded with 1-star reviews. BaFin receives 4,000 complaints. Trade Republic sends out apology emails.
It’s the first real crisis. But they make it through.