Introduction
Lightyear, an investment app, has announced the launch of UK business investment accounts that will allow sole director companies to invest in stocks, funds, and ETFs on the same terms as retail customers. In addition, Lightyear has entered into a new partnership with asset manager BlackRock, making its money market funds accessible to Lightyear’s business customers.
The Changing Landscape
According to Lightyear CEO and co-founder Martin Sokk, the perception of cash as an asset for businesses has shifted. Previously, cash was considered a liability in many parts of Europe, as holding large amounts of cash resulted in banks charging fees. Now, businesses view cash as an asset.
Money Market Funds
Lightyear’s partnership with BlackRock enables its business customers to access money market funds. Money market funds are a type of mutual fund that invests in cash, cash equivalents, and short-term debt securities. They are commonly used by larger corporates as a cash management solution due to their low risk and high liquidity. However, these funds often have high fees or minimum investment amounts, making them inaccessible to most businesses. With Lightyear’s new business investment accounts, companies can access these funds for an annual fee ranging from 0.09% to 0.30%.
Competitors and Future Plans
While Lightyear competes with retail investment platforms like Hargreaves Lansdown and Freetrade, CEO Martin Sokk sees banks as the main competitors in the business investment space. He believes that businesses already have their money in banks, making them a natural rival. Lightyear initially targets sole-director businesses but plans to expand its support to multi-user and larger businesses in the coming months.
