“Do what is right, not what is easy,” Mr Leaf Li often tells his employees. After all, he himself chose the road less travelled when he left one of China’s top technology firms – Tencent to strike out on his own.
In the early 2000s, the computer science graduate, a pioneer employee with Shenzhen-based tech giant Tencent, received shares of the company that gave him financial freedom in his 20s. He could have retired early, which some of his colleagues did, but Mr Li had bigger ambitions.
He left his Tencent job in 2008 and plunged headlong into setting up Futu Holdings, the parent company of digital investment and wealth management platform, moomoo.
“It was time to make some changes,” said the 45-year-old founder, chief executive officer and chairman of Futu Holdings.
In his day job at Tencent, Mr Li led the product design and development of Tencent Video, and successfully completed 24 domestic and international projects. His savviness with technology and experience in developing Internet products left him unsatisfied with the online services rendered by traditional brokerages.
He explained that at that time, stock brokerages had antiquated trading systems with unfriendly interfaces, limited functions and frequent order latency that cost him several lucrative investment opportunities. These problems once even culminated in losses totalling tens of thousands of Hong Kong dollars.
After seeing the lack of holistic investment tools available, Mr Li decided to take it upon himself to create an all-in-one trading platform that solves all the existing pain points and offers a user-friendly trading experience.
"I took inspiration from Tencent’s DNA in research and development to create a better user experience in trading equity,” says Mr Li. He also built a community of traders at both ends of the spectrum, from the most sophisticated tech millionaires to the amateur retail investor, so that investors could stress test their investment ideas and share their experiences with each other.
Futu, which in Chinese means path to riches, was born in Hong Kong in October 2012.
Team building over mutton hotpot meals
During the initial years, Mr Li’s entrepreneurial journey was not all smooth sailing. External financing was drying up. On top of that, he had to hold together a team of ex-Tencent employees who took a pay cut to join him on a project with an uncertain future.
“Eating out together is our way to boost team cohesion,” says Mr Li, recounting the mutton hotpot as treats for his team in the early years of Futu’s founding. Over such meals, the team discussed their aspirations and envisioned Futu one day having billions of assets under management, with hundreds of billions of dollars’ worth of trading volume.
“Other people in the restaurant heard us talking and turned around to look at us. In their eyes, we were probably a group of crazy people talking about impossible things,” he says.
“But indeed, in the early stage of starting a business, we must continue talking about our vision to hold the team together. Those who share the same vision stay, and those who do not, leave.”
To give Futu the boost it needed, Mr Li sold his Tencent shares and poured around HK$40 million (S$6.9 million) from his personal savings into the company.
Mr Li also knocked on the doors of numerous Hong Kong brokerages in a bid to convince them to test his proprietary system. He received help from Mr. Dennis Wu, then managing director of CES Capital International, and that culminated in the certification of Futu’s system by the Hong Kong Stock Exchange. This catalysed Futu’s journey towards success.
With the certification, Futu soon received US$10 million (S$13 million) in Series A funding from Tencent, Matrix Partners, and Sequoia Capital in 2014. Another US$60 million in Series B followed in June 2015, and US$145.5 million in the Series C round in June 2017, all from the same investors.
A decade on, Futu Holdings has flourished and grown into one of the largest retail brokerages in Hong Kong. It has also expanded its footprint overseas, opening branches in the United States, Singapore, and Australia. As of the third quarter of 2022, it has more than 1.4 million account holders using the moomoo platform for personal investment, wealth management and education.
Headquartered in Hong Kong and listed on Nasdaq in the United States in 2019, Futu today has a market capitalisation of around US$9.8 billion (as of Dec 2022).
“From the very beginning, Futu’s vision has been rooted in making investing easier and more accessible for users through technology,” says Mr Li, adding that the importance of UX, or user experience, is a major takeaway from his experience working at Tencent.
“In a good way, Tencent will do a lot of work to improve its products and services before it charges users 10 yuan (roughly S$1.5) for a membership subscription. Many other brokerages I’ve used cashed in on their clients so easily and didn’t bother improving the products and user experience even with millions of dollars earned through commissions,” he adds.
Today, the make-up of Futu reflects Mr Li’s background in tech, with about 70 per cent of its 2,300 employees sitting in the research and development (R&D) department. The heavy focus on R&D is a testament to his – and Futu’s – commitment to creating a user-centric product that values investors’ time and efforts.
First full-service digital brokerage in Singapore
After cementing its presence in Hong Kong, Futu set its eyes on the global stage. In March 2021, Futu launched moomoo in Singapore.
The arrival of moomoo in Singapore coincided with a rise in financial literacy among millennials and Gen Zs, who were seeking a more convenient and accessible way to invest. The moomoo app allows users to manage their investment portfolios on the go and gives them access to stock markets in the US and Hong Kong at a lower cost than traditional brokerages.
“The youth in Singapore are becoming more interested in investing. Compared to their more established counterparts, they start with significantly less capital, which means that most of the commission earned will be eaten up by the high commissions of traditional brokerages. Low commissions make it easier for young investors to enter the market, allowing them to test the waters,” says Mr Li.
In less than two years since entering Singapore, moomoo SG managed to bring on board more than one-fifth of the Singapore population aged 20 to 70. In June 2022, moomoo SG received full memberships across securities and derivatives markets from the Singapore Exchange. This makes moomoo SG the first full-service digital brokerage in the country.
Moomoo SG is not only active in servicing retail investors. It also worked with financial institutions in the listing of the Lion-OCBC Securities Singapore Low Carbon Exchange Traded Fund and was the main placement agent for the Initial Public Offering of iWOW, the maker of the TraceTogether token.
Mr Li says Futu’s success in Singapore and beyond is rooted in the company’s commitment to provide investors a user-friendly platform to manage their portfolios. The company will continue to abide by the same philosophy to attract new clients and strengthen loyalty among existing users as investors look for ways to preserve and grow their wealth amid an inflationary environment.
“Our unwavering efforts in sharpening technology edge, bringing new features and upgraded products to fulfil unmet demands across various markets are the key to locking in high-level user loyalty for our brands,” he says.