Freetrade, the British online brokerage renowned for its zero-commission trading platform, has been acquired by IG Group. The acquisition, valued at £160 million ($195 million), represents a 29% discount from Freetrade's previous valuation. Founded in 2016, Freetrade has garnered significant popularity among young, inexperienced traders in the U.K., especially during the retail trading frenzy spurred by events like the GameStop "short squeeze" in early 2021.
The company faced challenging macroeconomic conditions in 2022 and 2023, which severely impacted its valuation. In 2023, Freetrade's valuation plummeted to £225 million during a crowdfunding round, marking a steep decline from its peak valuation of £650 million. The acquisition by IG Group comes as the latest development in a rapidly changing landscape for financial trading platforms, following the £5.4 billion acquisition of Hargreaves Lansdown by a consortium that includes CVC Group.
Viktor Nebehaj, CEO and co-founder of Freetrade, expressed optimism about the acquisition.
"This is a transformative deal that recognizes the significant value that Freetrade has created." – Viktor Nebehaj, CEO and co-founder of Freetrade
He further highlighted the potential for growth and innovation with IG Group's support.
"Together with IG Group's significant resources and backing, this is an exciting opportunity to accelerate our growth and delivery of new products and features." – Viktor Nebehaj, CEO and co-founder of Freetrade
Freetrade's rise was fueled by its appeal to younger traders seeking commission-free trading options during the pandemic. However, the worsening economic environment has led to a significant reduction in its market valuation. Despite these challenges, the acquisition deal is poised to provide Freetrade with the resources needed to enhance its offerings and expand its presence in the online brokerage market.
The transaction remains subject to customary closing conditions, including regulatory approvals. Freetrade anticipates that the deal will conclude later this year, marking a new chapter in its journey as part of IG Group.
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