Estonia's tech elite are getting behind a European challenger to Robinhood

A group of influential figures from Estonia’s tech industry is rallying behind Lightyear, an ambitious startup poised to rival Robinhood in the European market for commission-free trading. Based in London, Lightyear offers an app that allows users to invest in a diverse selection of over 5,000 stocks, ETFs, and money market funds. Founded in 2021 by former Wise employees Martin Sokk and Mihkel Aamer, Lightyear is gearing up to announce a significant funding boost of $23 million, led by NordicNinja, a venture capital fund with Japanese backing that operates in Europe. Among the prominent investors is Markus Villig, co-founder of the ride-hailing unicorn Bolt. Sokk expressed to CNBC that while the business does not urgently require additional funding, the opportunity to collaborate with such experienced investors was too valuable to pass up. "People like Markus have been building massive companies in many markets, and this is really exciting for us because it’s challenging to navigate all the local dynamics and understand customer needs," he stated. Currently operational in 25 countries, Lightyear plans to expand into five more markets swiftly, thanks to the support of investors like Villig. He acknowledged the difficulties of scaling operations across multiple nations within a heavily regulated sector, pointing out that Europe’s relatively underdeveloped retail investment landscape presents significant opportunities for innovation. The recent funding round also saw participation from other Estonian angel investors such as Taavet Hinrikus, co-founder of Wise; Ott Kaukver, former CTO of Checkout.com; and Jaan Tallinn, a founding engineer of Skype. Estonia has earned a reputation as a prominent tech hub, boasting the highest number of unicorns per capita in Europe, as noted by the Estonian Investment Agency. The latest funding values Lightyear at an impressive $200 million to $300 million, a notable increase from its previous valuation during a $25 million funding round in 2022, according to sources who requested anonymity. In addition to the financial infusion, Lightyear is set to introduce new AI-driven features, capitalizing on the growing interest in artificial intelligence among startups. One of these innovations, named "Why Did It Move," enables users to identify specific events that affected stock price fluctuations on a particular day. The platform will also offer AI-generated "bull" and "bear" analyses on stocks and provide brief updates on users’ portfolio assets. Sokk envisions two investment models emerging in the market: a "self-driving money" approach, where AI manages investment goals, and a traditional method that involves strategizing independently. Despite the fierce competition from established brokerage firms and newer tech players like Robinhood, Revolut, and Trade Republic, Sokk is confident that Lightyear's unique offerings will allow it to stand out. Rather than focusing on high-risk products like cryptocurrency and margin trading, the company aims to cater to long-term investors. Additionally, Lightyear plans to launch its own crypto product in two months, designed with a long-term perspective in mind.