LONDON – Freetrade, a British rival to popular stock trading app Robinhood, said on Thursday it had been acquired by online investment platform IG Group.
The deal values Freetrade at 160 million kilos ($195 million) – a 29% discount to its last valuation. The startup announced that it might proceed to operate as a commercially independent company under its own brand.
Founded in 2016, Freetrade's commission-free trading platform gained popularity amongst younger, more inexperienced traders within the UK.
The app initially offered stocks, but later expanded to incorporate trading in exchange-traded funds, savings products and government bonds.
During the pandemic, Freetrade experienced a ruckus amongst retailers. The app benefited greatly from GameStop's “short squeeze” in early 2021, when traders on a Reddit forum for retail investors flocked to the stock and its price rose.
Short selling is the practice of an investor borrowing an asset after which selling it on the open market with the expectation of later buying it back for less money at a profit.
However, worsening macroeconomic conditions in 2022 and 2023 hit Covid high-flyers like Freetrade hard – and in 2023 Freetrade closed a crowdfunding round valuing it at £225m, down 65% from its previous figure of £650m pound lay.
The deal is a possible signal of further consolidation within the wealth technology industry. It comes after that Hargreaves Lansdown has been acquired for £5.4bn by a consortium of investors including private equity giant CVC Group.
Viktor Nebehaj, CEO and co-founder of Freetrade, described the acquisition as “a transformative deal that recognizes the significant value that Freetrade has created.”
“Together with IG Group’s significant resources and support, this is an exciting opportunity to accelerate our growth and delivery of new products and features,” he added.
Freetrade said the transaction is subject to customary closing conditions, including regulatory approvals, adding that it expects to shut the deal later this 12 months.
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