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Online trading platform IG Group has acquired share trading company Freetrade for £160m.
The London-based FTSE 250 component said the purchase, which will be completed by mid-2025, will help boost its trade and investment offering in the UK, as well as open up new client segments and capabilities.
Launched in 2018, Freetrade has 720,000 customers in the UK and £2.5bn under management at the end of 2024. Its net inflows in 2024 are equivalent to 22 per cent of its initial assets under management.
In September, the company achieved its first profitable half-year since its creation.
Freetrade made an operating profit of £91,000, compared to a previous adjusted loss of £5.6 million in the first half of its 2023 financial year.
Freetrade also pulled out of the Swedish market in August to focus solely on the UK market.
Still, the platform’s revenue grew by 32 percent in 2024, reaching £27.5 million, with a record revenue figure reached in the fourth quarter of the financial year.
Acquisition: IG Group says its purchase of Freetrade will offer a return on the £160m it is spending to acquire the platform.
Breon Corcoran, chief executive of IG, said: ‘This is a unique opportunity to strengthen IG’s trading and investment offering in the UK and expand our target market.
“Freetrade is one of the most successful emerging players in the UK customer direct investment market, with a strong brand, highly scalable technology and rapid growth.”
IG will maintain Freetrade as an independent entity and brand, with the company’s CEO and co-founder, Viktor Nebehaj, remaining at the helm along with his current leadership team, who will continue efforts to further grow the company.
Nebehaj said: ‘This is an exciting opportunity to accelerate our growth and delivery of new products and features on our award-winning platform.
“IG’s vision for Freetrade is closely aligned with ours and their support will be of great benefit as we continue to scale the business.”
Following the purchase, IG will further expand Freetrade’s product range, as well as adding new features and increasing market activity.
He said most of Freetrade’s expected profits will be reinvested to grow the business over the next two years.
Freetrade currently offers over 6,000 shares and ETFs, fractional shares, UK treasury bills, Isas, Sipps and proxy voting.
IG said the acquisition will be funded with existing capital and will generate a return on invested capital three to five years after completion.
Last year, the company reported a regulatory capital surplus of more than £600 million. He said the purchase will still leave him plenty of room for maneuver and that he will seek to return capital to shareholders.
IG shares rose 1.27 percent Thursday afternoon and have risen 33 percent over the past 12 months. The firm will report its first half results on January 23.
What about free trade crowdfunding investors?
Freetrade has done several crowdfunding rounds in recent years with the goal of raising money from regular investors.
On social media, there are posts from some who appear to have lost large sums after investing this way.
X user @onscreenlol said he invested £30,000 in January 2021. He added: “Today I am forced to sell my shares at £1.19 each for £3,800.”
This represents a loss of £26,200 on the original outlay.
In November 2021, Freetrade sold Crowdcube for £9.25 per share and raised £8.4 million.
In another round in June 2023 it sold for £2.60 and raised £2.3 million. Both had targets of just £1 million.
Have you been burned after buying Freetrade on Crowdcube? Get in touch: editor@thisismoney.co.uk
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