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LONDON — Freetrade, the British rival to the popular stock trading app Robinhood, said Thursday that it has been acquired by online investment platform IG Group.
The deal values Freetrade at £160m ($195m) – a 29% discount to latest assessment. The startup said it will continue to operate as a commercially autonomous entity under its own brand.
Founded in 2016, Freetrade has gained popularity mainly among young and inexperienced traders in the UK thanks to its commission-free trading platform.
The app initially offered stocks, but later expanded to include trading in exchange-traded funds, savings products and government bonds.
During the pandemic, Freetrade was all the rage for retailers. The app benefited greatly from GameStop’s “short squeeze” in early 2021, when traders on Reddit’s retail investor forum piled into the stock and sent it soaring.
Short selling refers to the practice of an investor borrowing an asset and then selling it in the open market with the expectation of buying it back for less money in the future at a profit.
However, worsening macroeconomic conditions in 2022 and 2023 hit Covid leaders like Freetrade hard — and in 2023 Freetrade ended crowdfunding round at valuation at £225m, down 65% from the £650m it cost previously.
The deal is a possible signal for further consolidation in the well-being technology industry. It comes after Hargreaves Lansdowne was acquired by a consortium of investors for £5.4 billion including private equity giant CVC Group.
Viktor Nebegai, CEO and co-founder of Freetrade, described the takeover as “a transformational deal that recognizes the significant value that Freetrade has created.”
“Combined with IG Group’s significant resources and support, this is a great opportunity to accelerate our growth and deliver new products and features,” he added.
Freetrade said the deal is subject to customary closing conditions, including regulatory approvals, and added that it expects the deal to close later this year.
