The Freetrade utility on a smartphone and desktop PC.
Free commerce
LONDON – Freetrade, a British rival to fashionable inventory buying and selling app Robinhood, mentioned Thursday it has been acquired by on-line funding platform IG Group.
The deal values Freetrade at £160 million ($195 million) – a 29% low cost to the final valuation. The startup mentioned it could proceed to function as a commercially standalone entity below its personal model.
Based in 2016, Freetrade gained recognition amongst primarily youthful, extra inexperienced merchants in Britain with its zero-commission buying and selling platform.
The app initially began providing shares, however later expanded to incorporate buying and selling in exchange-traded funds, financial savings merchandise and authorities bonds.
In pandemic occasions, Freetrade ran excessive on retailer frenzy. The app benefited closely from the GameStop “brief squeeze” in early 2021, when merchants on a Reddit discussion board for retail buyers piled into the inventory and brought about its worth to rise.
Quick promoting refers back to the follow the place an investor borrows an asset after which sells it on the open market with the expectation of shopping for it again for much less cash at a revenue sooner or later.
Nonetheless, deteriorating macroeconomic circumstances in 2022 and 2023 hit Covid high-flyers like Freetrade onerous – and in 2023 Freetrade accomplished a crowdfunding spherical at a valuation of £225 million, down 65% from the £650 million it beforehand was value.
The deal is a possible sign for additional consolidation within the wealth expertise sector. It comes subsequent Hargreaves Lansdown was acquired for £5.4 billion by a consortium of buyers together with non-public fairness big CVC Group.
Viktor Nebehaj, CEO and co-founder of Freetrade, described the acquisition as a “transformative deal that acknowledges the numerous worth Freetrade has created.”
“Along with the numerous sources and assist of IG Group, that is an thrilling alternative to speed up our progress and supply of recent merchandise and options,” he added.
Freetrade mentioned the transaction is topic to customary closing circumstances, together with regulatory approval, including that it expects to shut the deal later this yr.
