Robinhood rival Freetrade acquires UK arm of Australian investing platform Stake

British investment app startup Freetrade has agreed to acquire the UK arm of Australian platform Stake, according to an exclusive report from CNBC. The financial details of the deal remain undisclosed by both companies, including the value of Stake’s UK client base.

In an interview on Tuesday, Freetrade told CNBC that it plans to bring all of Stake’s UK clients and their assets onto its platform. This move is expected to strengthen Freetrade’s presence in the UK, where competition among retail investment platforms is heating up, particularly with the arrival of U.S. giant Robinhood.

Stake, founded in Sydney in 2017, set out to offer affordable brokerage services for retail investors. It later expanded into New Zealand and the UK. However, after a recent internal review, Stake has decided to refocus on its core markets in Australia and New Zealand.

As part of the transition, Stake’s UK customers will receive instructions on how to transfer their funds and assets to Freetrade. Stake users can continue using their accounts until November when the transfer process is expected to be completed, CNBC reported.

Freetrade, which primarily operates in the UK, has been working to broaden its reach into the European Union. It offers a variety of investment options, including stocks, exchange-traded funds, ISAs, and government bonds. The company reported having more than 1.4 million users as of April 2024.

Earlier this year, the company’s co-founder and CEO, Adam Dodds, stepped down after six years. He was replaced by Viktor Nebehaj, who was previously the chief operating officer.

Freetrade saw a boost during the retail investing craze of 2020 and 2021, fueled by events like the GameStop surge. However, rising interest rates in the following years dampened investor interests, affecting both Freetrade and competitors like Robinhood.

In 2022, Freetrade reduced its workforce by 15%, and its valuation dropped by 65% to £225 million during a crowdfunding round. The company attributed the decline to a shifting market landscape.

However, Freetrade’s fortunes have improved recently. The firm posted its first-ever profitable half-year in 2024, with earnings of £91,000 and a 34% rise in revenue to £13.1 million.

“I’m focused on scaling Freetrade into the leading commission-free investment platform in the UK market,” Freetrade CEO Nebehaj told CNBC. “This deal shows our commitment to capitalize on opportunities for inorganic growth to reach that goal.”

“Over the last few months, we have worked closely with Stake to ensure a smooth transition and good outcomes for their UK customers. We look forward to welcoming them and continuing to support them on their investment journeys.”

Freetrade currently manages over £2 billion in assets for its UK users. Globally, Stake oversees assets totaling $2.9 billion. Meanwhile, Robinhood, which holds a much larger $144 billion in managed assets, recently launched a securities lending program in the UK to attract new clients.

Freetrade