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London-based online trading platform Freetrade told CNBC on Tuesday that it has agreed to acquire British client Book of Stake, an Australian investment app.
The move is part of a wider bid by Freetrade to strengthen its domestic business and comes as the UK digital investment platform faces increasing competition from new entrants, particularly from US heavyweights. Ta. robin hood.
The startup told CNBC exclusively that it has signed a deal with Stake to take over all of its customers and migrate all assets it manages in the UK to its own platform.
Freetrade and Stake declined to disclose financial information about the deal, including the value of Stake’s UK customer book.
Based in Sydney, Australia, Stake was founded in 2017 by entrepreneurs Matt Leibowitz, Dan Silver and John Abitz with the aim of providing low-cost brokerage services to retail investors in Australia. was established in
The company, which also operates in New Zealand, launched its service in the UK in 2020. However, following a recent business review, Stake has decided to focus primarily on its Australian and New Zealand operations.
Following the agreement, Stake UK customers will be contacted “in the coming weeks” with details on how to move their funds and other assets to Freetrade, the companies said. Customers can continue to use their staked accounts until assets and cash are transferred to Freetrade in November.
Freetrade primarily operates in the UK, but is also aiming to expand into the European Union. The company’s platform offers a wide range of investment products, including stocks, exchange-traded funds, personal savings accounts, and government bonds. As of April 2024, the number of users exceeded 1.4 million.
Earlier this year, CNBC reported that the company’s co-founder and CEO Adam Dodds had decided to leave the company after six years at the helm. He was replaced by Viktor Nebehaj, the company’s chief operating officer at the time.
Freetrade benefited from the retail stock investing frenzy of 2020 and 2021, when GameStop and other so-called “meme stocks” soared. In the years that followed, Freetrade and its rivals, including Robinhood, suffered from rising interest rates that soured investor sentiment.
Freetrade has announced plans to lay off 15% of its workforce in 2022. The following year, the company saw its valuation fall by 65% to £225 million ($301 million) in an equity crowdfunding round. At the time, Free Trade claimed that the cause of the decline in market value was “differences in the market environment.”
But lately, things have been looking up for the startup. Freetrade reported its first-ever half-year profit in 2024, with adjusted profit before interest, tax, depreciation and amortization reaching £91,000 in the six months to June. Revenues rose 34% year-on-year to £13.1m.
“I am focused on growing Freetrade into the leading commission-free investment platform in the UK market,” CEO Nebehai said in a statement shared with CNBC. “This agreement demonstrates our commitment to leveraging inorganic growth opportunities to achieve that goal.”
“Over the past few months, we have worked closely with stakes to deliver a smooth transition and positive outcome for our UK customers. We welcome them and look forward to continuing to support them on their investment journey. I’m looking forward to it.”
Freetrade currently manages over £2 billion of assets for UK customers. Globally, Stake manages over $2.9 billion in assets.
Robinhood, by far the largest company in the US with $144 billion in assets under management, launched in the UK with much fanfare in November 2023. Earlier this month, the company launched a securities lending facility in the UK with the aim of attracting more prospective UK customers.
