London-based online trading platform Freetrade has agreed to acquire the U.K. customer book of Stake, an Australian investing app, as part of its strategy to enhance its domestic operations.
This move comes amid intensifying competition from new entrants in the digital investment space, including the U.S. trading giant Robinhood, which snatched Jordan Sinclair from Freetrade to lead its UK business.
Stake divesting from UK operation
Freetrade confirmed the acquisition will involve taking on all of Stake’s U.K. clients and transferring their assets to Freetrade’s platform. The companies did not disclose the financial details of the transaction, including the valuation of Stake’s U.K. customer base.
Founded in 2017, Stake offers low-cost brokerage services primarily to retail investors in Australia and has expanded its operations to New Zealand and the U.K., launching services in the latter in 2020. However, Stake recently decided to refocus its efforts on its Australian and New Zealand markets following a business review.
Customers of Stake in the U.K. will receive communication soon regarding the process of transferring their assets to Freetrade. Until the transfer is completed in November, Stake users can continue to access their accounts.
Freetrade operates in the UK and Europe
Freetrade operates mainly in the U.K. but is also looking to expand into the European Union. The platform offers a diverse range of investment products, including stocks, exchange-traded funds (ETFs), individual savings accounts (ISAs), and government bonds. As of April 2024, Freetrade reported over 1.4 million users.
Earlier this year, Freetrade underwent leadership changes, with co-founder and former CEO Adam Dodds stepping down and being succeeded by Viktor Nebehaj, the former chief operating officer. This transition occurred during a challenging period for the firm, which saw significant layoffs and a substantial drop in its valuation, attributed to changing market conditions.
Despite these challenges, Freetrade recently reported its first-ever half-year profit, with adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) reaching £91,000 for the six months ending June 2024. Revenues rose 34% year-over-year to £13.1 million.
Freetrade currently manages over £2 billion in assets for its U.K. clients, while Stake boasts more than $2.9 billion in assets under administration globally.
Freetrade launched ‘share lending’
Freetrade recently launched ‘share lending’, a new service powered by Sharegain that enables its clients to generate passive income from lending their stocks and ETFs.
The commission-free investment platform was able to launch its securities lending program with no upfront costs and no additional headcount.
