The Freetrade application on a smartphone and desktop PC.
Free trade
LONDON – Freetrade, a British rival to popular stock trading app Robinhood, said Thursday it has been acquired by online investment platform IG Group.
The deal values Freetrade at £160 million ($195 million) – a 29% discount to the last valuation. The startup said it would continue to operate as a commercially standalone entity under its own brand.
Founded in 2016, Freetrade gained popularity among mainly younger, more inexperienced traders in Britain with its zero-commission trading platform.
The app initially started offering stocks, but later expanded to include trading in exchange-traded funds, savings products and government bonds.
In pandemic times, Freetrade ran high on retailer frenzy. The app benefited heavily from the GameStop “short squeeze” in early 2021, when traders on a Reddit forum for retail investors piled into the stock and caused its price to rise.
Short selling refers to the practice where an investor borrows an asset and then sells it on the open market with the expectation of buying it back for less money at a profit in the future.
However, deteriorating macroeconomic conditions in 2022 and 2023 hit Covid high-flyers like Freetrade hard – and in 2023 Freetrade completed a crowdfunding round at a valuation of £225 million, down 65% from the £650 million it previously was worth.
The deal is a potential signal for further consolidation in the wealth technology sector. It comes next Hargreaves Lansdown was acquired for £5.4 billion 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 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 approval, adding that it expects to close the deal later this year.