Freetrade application on smartphone and desktop.
Free trade
LONDON – Freetrade, a British competitor to the popular stock trading app Robinhood, announced on Thursday that it has been acquired by online investment platform IG Group.
The deal values Freetrade at £160m ($195m) — a 29% discount on last valuation. The startup said it will continue to operate as a commercially independent entity under its own brand.
Founded in 2016, Freetrade gained popularity mainly among younger, more inexperienced traders in the UK with its commission-free trading platform.
The application initially started with offering stocks, but later expanded to trading in exchange-traded funds, savings products and government bonds.
At the time of the pandemic, Freetrade was at the height of retail ire. The app benefited greatly from GameStop’s “short squeeze” in early 2021, when traders on the Reddit retail forum piled up the stock and caused its price to rise.
Short selling refers to the practice of an investor borrowing an asset and then selling it on the open market with the expectation of repurchasing it in the future for less money at a profit.
However, worsening macroeconomic conditions in 2022 and 2023 hit Covid’s big players like Freetrade hard — and in 2023 Freetrade completed round of group financing at valuation of £225 million, down 65% from the £650 million it was worth previously.
The deal is a potential signal for further consolidation to come in the wealth technology industry. It comes later Hargreaves Lansdowne he was which was bought by a consortium of investors for £5.4 billion including private equity giant CVC Group.
Viktor Nebehaj, CEO and co-founder of Freetrade, described the takeover as “a transformative deal that recognizes the significant value that Freetrade has created.”
“Together with the significant resources and support of IG Group, 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 close the deal later this year.
