British
retail investing platform Freetrade has agreed to acquire the UK customer base
of Australian rival Stake, in a move that underscores the intensifying
competition in the British digital investment landscape. The deal, first
reported by CNBC, will see Freetrade take on all of Stake’s UK clients and
their associated assets.
Freetrade Acquires Stake’s
UK Customer Base, Bolstering Domestic Presence
Freetrade,
which currently manages over £2 billion in assets for UK clients, expects to
complete the transfer of Stake’s UK customer accounts by November. Stake users
will be contacted in the coming weeks with details on how to migrate their
funds and assets to the Freetrade platform.
“This
deal shows our commitment to capitalizing on opportunities for inorganic growth
to reach that goal,” commented Viktor Nebehaj, the new CEO of Freetrade,
who replaced co-founder Adam Dodds in the position. Dodds
decided to step down in May this year after six years of developing the
company.
“I’m
focused on scaling Freetrade into the leading commission-free investment
platform in the UK market,” Nebehaj added.
The
financial terms of the transaction were not disclosed by either company. Stake,
which entered the UK market in 2020, has decided to refocus on its core
operations in Australia and New Zealand following a recent business review.
Becoming Profitable and
Competing Robinhood
This
acquisition comes at a pivotal time for Freetrade, which reported its first
profitable half-year in 2024. The company saw adjusted earnings before
interest, tax, depreciation, and amortization reach £91,000 in the six months
through June, with revenues climbing 34% year-over-year to £13.1 million.
This was
also confirmed by the results reported for the first quarter when the company
reached breakeven. Last
year, it lost £8.3 million, still an improvement from the £28.8 million
loss recorded in the previous year. The company’s revenues climbed to £21.6
million in 2023, marking an uplift of 45% from 2022.
“Over the
last few months, we have worked closely with Stake to ensure a smooth
transition and good outcomes for their UK customers,” CEO Nebehaj said. “We
look forward to welcoming them and continuing to support them on their
investment journeys.”
London-based Robinhood rival Freetrade buys UK arm of Australian investing platform Stake https://t.co/36KAe5QNhV
— Kiwi (@Kiwibest) October 1, 2024
The move
also reflects the broader competitive pressures in the UK retail investing
sector, particularly with the recent entry of US giant Robinhood into the
market. Robinhood, which
launched in the UK in November 2023, has been aggressively expanding its
offerings, recently introducing
a securities lending scheme to attract British investors.
The company
will need to navigate the challenges of integrating Stake’s customer base while
continuing to innovate and compete with both established players and new
entrants in the rapidly changing fintech sector.
British
retail investing platform Freetrade has agreed to acquire the UK customer base
of Australian rival Stake, in a move that underscores the intensifying
competition in the British digital investment landscape. The deal, first
reported by CNBC, will see Freetrade take on all of Stake’s UK clients and
their associated assets.
Freetrade Acquires Stake’s
UK Customer Base, Bolstering Domestic Presence
Freetrade,
which currently manages over £2 billion in assets for UK clients, expects to
complete the transfer of Stake’s UK customer accounts by November. Stake users
will be contacted in the coming weeks with details on how to migrate their
funds and assets to the Freetrade platform.
“This
deal shows our commitment to capitalizing on opportunities for inorganic growth
to reach that goal,” commented Viktor Nebehaj, the new CEO of Freetrade,
who replaced co-founder Adam Dodds in the position. Dodds
decided to step down in May this year after six years of developing the
company.
“I’m
focused on scaling Freetrade into the leading commission-free investment
platform in the UK market,” Nebehaj added.
The
financial terms of the transaction were not disclosed by either company. Stake,
which entered the UK market in 2020, has decided to refocus on its core
operations in Australia and New Zealand following a recent business review.
Becoming Profitable and
Competing Robinhood
This
acquisition comes at a pivotal time for Freetrade, which reported its first
profitable half-year in 2024. The company saw adjusted earnings before
interest, tax, depreciation, and amortization reach £91,000 in the six months
through June, with revenues climbing 34% year-over-year to £13.1 million.
This was
also confirmed by the results reported for the first quarter when the company
reached breakeven. Last
year, it lost £8.3 million, still an improvement from the £28.8 million
loss recorded in the previous year. The company’s revenues climbed to £21.6
million in 2023, marking an uplift of 45% from 2022.
“Over the
last few months, we have worked closely with Stake to ensure a smooth
transition and good outcomes for their UK customers,” CEO Nebehaj said. “We
look forward to welcoming them and continuing to support them on their
investment journeys.”
London-based Robinhood rival Freetrade buys UK arm of Australian investing platform Stake https://t.co/36KAe5QNhV
— Kiwi (@Kiwibest) October 1, 2024
The move
also reflects the broader competitive pressures in the UK retail investing
sector, particularly with the recent entry of US giant Robinhood into the
market. Robinhood, which
launched in the UK in November 2023, has been aggressively expanding its
offerings, recently introducing
a securities lending scheme to attract British investors.
The company
will need to navigate the challenges of integrating Stake’s customer base while
continuing to innovate and compete with both established players and new
entrants in the rapidly changing fintech sector.
This post is originally published on FINANCEMAGNATES.
