Freetrade acquired up by IG Group at 29% valuation discount

IG Group Acquires Freetrade in a £160 Million Deal

LONDON — Freetrade, a British rival to popular stock trading app Robinhood, has announced its acquisition by online investing platform IG Group. The deal, valued at £160 million ($195 million), marks a 29% discount to Freetrade’s last valuation. Despite the acquisition, Freetrade will continue to operate independently under its own brand.

A Brief History of Freetrade

Founded in 2016, Freetrade quickly gained traction among younger and less experienced traders in the U.K. for its zero-commission trading platform. Initially focused on equities, the app later expanded its offerings to include exchange-traded funds, savings products, and government bonds.

Market Ups and Downs

During the retail trader frenzy of the pandemic, Freetrade experienced significant growth, especially during the GameStop “short squeeze” in early 2021. However, as macroeconomic conditions worsened in 2022 and 2023, Freetrade, like many other Covid-era success stories, faced challenges. In 2023, the company completed a crowdfunding round at a valuation of £225 million, down 65% from its previous £650 million valuation.

Consolidation in the Wealth Technology Industry

The acquisition of Freetrade by IG Group signals potential consolidation in the wealth technology sector. This follows the recent £5.4 billion acquisition of Hargreaves Lansdown by a consortium of investors, including private equity firm CVC Group.

Future Growth Plans

Viktor Nebehaj, CEO and co-founder of Freetrade, expressed optimism about the acquisition, describing it as a “transformative deal” that recognizes the value Freetrade has created. He highlighted the opportunity to leverage IG Group’s resources to accelerate growth and introduce new products and features.

Closing Remarks

The acquisition is subject to regulatory approvals and other customary closing conditions. Freetrade anticipates finalizing the deal later this year, paving the way for a new chapter in its growth journey.