Zecco will kill stock trade commissions
Zecco.com, a Los Angeles company backed by early Skype investor, Morten Lund, says it is going to introduce “zero commission” trading Oct 9th, undercutting the entire industry of online traders, from E*Trade, Charles Schwab to Ameritrade.
The company’s Web site is blank right now, showing only a countdown to launch.
Outlandish, you say? Well, Lund (pictured here) funded Skype, the Internet telephone company which shook up the telecom industry, and he declares “there is absolutely no reason consumers should accept paying anywhere from $10 to $20 for a service that is easy to provide at no charge at all.” He says Zecco is his “biggest shot ever.”
Lund is not disclosing the amount he has invested. However Marcel Boekhoorn, a Dutch entreprenour, invested €4 million recently, the company said three weeks ago. Other investors include Dutch Coca-Cola chief Pier Baarsma, and Soren Kenner.
Lund said fierce competition among the major brokerages has led to massive customer acquisition costs, which prevent them from lowering costs further.
The actual cost of a trade is around $2, but the big guys are spending $500 or more per customer in marketing costs and are running their platforms on outmoded systems, Zecco.com founder and CEO Jeroen Veth said in a statement. Veth, 37 is a former Merrill Lynch Vice President.
Next Story: Start-up Zecco raises more than $4M to introduce "zero commission" trading
Previous Story: Venture investments in Web 2.0 companies on track to double this year
About the Author, Matt Marshall
Matt launched VentureBeat in September of 2006, with the realization that no one else was covering the entrepreneurial and tech innovation scene with the velocity or depth that he was. Prior to founding VentureBeat, he covered venture capital for the San Jose Mercury News from 2001 to 2006. In 2002, Matt was awarded "Journalist of the Year" by the Northern California Society of Professional Journalists. Prior to working at the Merc, he was a correspondent for the Wall Street Journal in Bonn, Germany from 1995 to 1998, and a writer for the Washington Post in 1994. Matt holds a PhD in Government and an MA in German and European Studies from Georgetown University. In addition to VentureBeat, Matt is also the Executive Producer of DEMO, the leading launchpad event for emerging technologies.
