Nishil Parekh and Flora Somogyi on the launching and scaling journey at Lightyear
Lightyear is an investment platform targeting European retail investors. Founded in 2020 by Martin Sokk and Mihkel Aamer, both part of the TransferWise mafia, Lightyear boasts of a stellar team with impeccable track records in the fintech space and is ready to take on competitors with deeper pockets such as local banks and fintechs like Trade Republic from Germany.
In July 2022, Lightyear raised $25 million in a Series A round led by Lightspeed Venture
Partners, with backing from Richard Branson’s Virgin Group, Mosaic Ventures, Taavet+Sten and Metaplanet. Their investment platform also launched in 19 European countries, including Estonia, on the same day making Lightyear the first company to unlock such a large market in one go.
This article was written by Tejas Anil Shah, a team member of the sTARTUp Day communications & marketing team.
“I was tired of making the rich richer!” - Nishil
Nishil worked in the banking sector before he started out on his entrepreneurial journey in 2017 with Fountain, a robo-advisor aimed to make personalized investing more accessible. He tells us that he started the company because he was tired of making the rich richer. He believes there is a genuine need for better education about investing. This is exactly what Nishil, and Dann Bibas, his co-founder, wanted to work on through Fountain. After running the company for a while they realized that they didn’t have the financial resources to scale and bring about the desired impact. So, they decided that the best thing to do would be to
wind down operations in October 2018 and continue on a similar mission at larger organizations.
Nishil adds that everything he learnt about building products when working on Fountain came in handy at Revolut, where he built the investment product. Revolut had about
2 million users when he left. Now, Nish (as everyone calls him) is building Lightyear, which has transparency, and education as its core. Both being values that he cares about.
“The ability to think critically and focus on the right questions are marks of a good researcher.” - Flora
While Nish did his bachelor’s in Economics and continued on to banking and then fintech, Flora’s journey towards fintech was quite gradual and perhaps by chance. Flora studied social sciences for both her bachelor’s and master’s. So when going through college Flora says she had no idea that a field like user research even existed. In 2016, she got her first break working as a consultant at Big Sofa Technologies (now Lifestream), a video analytics company in the UK. Flora notes that one of the great things about that role was that she got to work on their product directly. That’s when she understood how user researchers and product managers could work together. She also got a sense of how her research affected the product. With this role, she realized that she already had what it takes to be a good researcher, and there was no turning back after that. Flora later held senior research roles at the UK arm of Robinhood, a popular trading platform and that’s how she made her way into fintech.
Why is the company called Lightyear? What’s the story? The name clashes with Lightyear, a popular Toy Story spin-off that hit the screens in June 2022. Search engine results seem to be optimized to show that content over the company. Any thoughts on this?
Nish: Investing is aspirational, and we believe we put our customers light years ahead with our product when it comes to investing. The name of the company also has to do with the emotions that we want to evoke in our customers. We’ve designed the user interface, right from the feel to the details like the icons that we use, to bring about the shoot-for-the-stars kind of emotions when you use it.
The name clash with the Lightyear movie was simply a coincidence, but since we launched we’ve been getting a lot of great press, and eventually, the search engines will catch up.
Lightyear is making investing simple and easy. Currently, all features are offered for free and the only fee charged is 0.35% on foreign exchange. If that is the case, then how does Lightyear plan to make money?
Nish: To answer the question of the business model, we believe that Foreign Exchange (FX) trading will be an important source of revenue for us. As you pointed out, we charge 0.35% of the amount exchanged as a service fee. We’re also looking to launch a subscription service later this year.
Flora: We don’t have the specifics of the premium models yet and it is a question that we are looking into right now. At this point stating that we have a subscription model – the details of which are a work-in-progress would be quite ambiguous. Moreover, it doesn’t give any information to the users. So the simple reason as to why we don’t have this information on the website or the app is because we don’t have the specifics nailed down yet.
On a different note, we are in the process of overhauling our website, to make information like this more accessible. So stay tuned for that.
Lightyear launched in 19 markets at the same time after just 9 months of research and building the product. What was this journey like?
Nish: Although our target is to make investing and trading stocks transparent all over the EU, launching in 19 countries on the same day is quite a feat. Even for us! So we take pride in what we achieved. One of the reasons we could make this happen is because of a great team and prioritizing well. For instance, we haven’t localized our app yet, and it is available only in English. While on the other hand, when it comes to regulatory approval and licenses, we haven’t held back. So, if it weren’t for this smart prioritization we wouldn’t have been able to pull this off.
Apart from that, we’re aware that we’ve made a lot of assumptions along the way. We’re flexible and open to the idea that these assumptions could be wrong. Doing so has given us the ability to be fast.
One of the missions that Lightyear has is to educate its users. What does the plan look like for this?
Nish: It can be quite overwhelming for users if we try to present too much information about the investing space. So the route we’ve taken right now is to have a lot of possibilities in the app for advanced users to find out more about how products work. We also provide a variety of reports about companies to the users. Reports from Wall Street and other places for example.
Flora: To add to that, we have quite a mix of users when it comes to investing. We have users who are completely new to investing, and also quite a few who are veterans. I’ve worked on the education product when I was at Robinhood as well, so I can bring some of those ideas over as well. But again, we are still in the early stages of these ideas being brought to fruition.
What is the company culture at Lightyear like?
Flora: I joined the team quite close to the recent launch, and it’s only been about four months. But right from the get-go, the team has been extremely supportive. I had many team members joining in on the user research calls, so we’re quite customer driven.
Nish: I’d say we’re quite flat and product focussed. I’m still the only Product Manager at Lightyear; if we didn’t have a product-driven culture I’d have a lot more grey hair on my head after the launch. So, across the board, we’ve hired product designers, product engineers etc., instead of just designers, and engineers. This has definitely given us an advantage when it comes to building the product itself.
Nishil and Flora delivered a seminar titled “Congratulations, You've Launched Your Product. Now What?” that was extremely well received at sTARTUp Day 2022. In the seminar, they candidly shared their journey of launching Lightyear across Europe just nine months after launching the MVP in the UK. They also pointed out how user research and product development need to work hand in hand to find the right market fit.