Freetrade app for smartphones and desktops.
free trade
LONDON – Freetrade, the British rival of popular stock trading app Robinhood, said on Thursday it has been acquired by online investment platform IG Group.
The deal values Freetrade at £160 million ($195 million) – 29% lower than its last valuation. The startup said it will continue to operate as an independent commercial entity under its own brand.
Founded in 2016, Freetrade has gained popularity among the UK’s predominantly young, inexperienced traders with its zero-commission trading platform.
The app initially offered stocks but has since expanded to launch trading in exchange-traded funds, savings products and government bonds.
During the pandemic, free trade thrived amid a frenzy among retail traders. The app benefited greatly from the GameStop “short squeeze” in early 2021, when traders on a Reddit forum for retail investors piled into the stock, causing its price to rise.
Short selling is when an investor borrows an asset and then sells it on the open market with the expectation that the asset will be repurchased for less money in the future at a profit.
However, deteriorating macroeconomic conditions in 2022 and 2023 hit COVID-19 businesses like Freetrade hard – in 2023, Freetrade completed a crowdfunding round at a valuation of £225 million, up from £650 million previously dropped by 65%.
The deal is a potential signal of further consolidation in the wealth technology industry. it appears after Hargreaves Landown Acquired for £5.4 billion by a consortium of investors including private equity giant CVC Group.
Freetrade CEO and co-founder Viktor Nebehaj described the acquisition as “a transformative transaction that recognizes the tremendous value Freetrade creates.”
He added: “Coupled with IG Group’s significant resources and support, this is an exciting opportunity to accelerate our growth and delivery of new products and features.”
Freetrade said the deal is subject to customary closing conditions including regulatory approvals, adding that it expected to close the deal later this year.
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