Freetrade received a 29% discount from the IG Group

LONDON — Freetrade, a rival to the popular stock trading app Robinhood, has been acquired by online investment platform IG Group, it said Thursday.

The deal values ​​Freetrade at £160 million ($195 million) – a 29% discount to its last estimate. The startup said it will continue to operate as a commercially independent entity under its own brand.

In the year Founded in 2016, Freetrade has gained popularity in the UK as a zero-commission trading platform, mainly among young and inexperienced traders.

The application initially started by offering stocks but later expanded to trade in exchange-traded funds, savings products and government bonds.

During the pandemic, Freetrade was riding high on retailer frustration. The app benefited greatly from GameStop’s “short squeeze” in early 2021, when traders on the Reddit forum piled into the stock for retail investors and caused it to rally in value.

Short selling refers to the practice of an investor borrowing an asset and then selling it in the market with the expectation that it will be repurchased for a profit in the future with less money.

However, in the year Worsening macroeconomic conditions in 2022 and 2023 hit covid high flyers like Freetrade – and in 2023, Freetrade saw a 65% drop in value to £225 million from its previous sales of £650 million.

The deal is a sign of continued consolidation for the resource technology industry. It will come later Hargreaves Lansdowne It was bought for £5.4bn by a consortium of investors including private equity giant CVC Group.

Victor Nebehage, CEO and co-founder of Freetrade, described the acquisition as “a transformative deal that recognizes the significant value that Freetrade has created.”

“This is an exciting opportunity to continue our growth and deliver new products and features with the significant resources and support of IG Group,” he said.

Freetrade said the transaction is subject to customary closing conditions, including regulatory approvals, and expects to close the deal later this year.