London-based Robinhood rival Freetrade buys UK arm of Australian investing platform Stake

London-based online trading level Freetrade told CNBC Tuesday that it's agreed to bargain the U.K. lawsuit publication of Stake, an Australian investing app.

The determination is portion of a broader bid from Freetrade to bolster its home concern and comes arsenic British integer concern platforms look rising contention from caller entrants — not slightest U.S. heavyweight Robinhood.

The startup told CNBC exclusively that it entered into a transaction with Stake to instrumentality connected each of the company's clients and determination each assets the steadfast manages successful the U.K. implicit to its ain platform.

Freetrade and Stake declined to disclose fiscal accusation of the deal, including the worth of Stake's U.K. lawsuit book.

Stake, which is based successful Sydney, Australia, was founded successful 2017 by entrepreneurs Matt Leibowitz, Dan Silver and Jon Abitz with the purpose of providing low-cost brokerage services to retail investors successful Australia.

The company, which besides operates successful New Zealand, launched its services successful the U.K. successful 2020. However, aft a caller concern review, Stake decided to absorption chiefly connected its Australia and New Zealand operations.

Following the deal, customers of Stake U.K. volition beryllium contacted with details astir however to determination their wealth and different assets implicit to Freetrade successful "the coming weeks," the companies said. Customers volition inactive beryllium capable to usage their Stake relationship until assets and currency are transferred to Freetrade successful November.

Freetrade operates chiefly successful the U.K. but has sought to grow into the European Union. It offers a scope of concern products connected its platform, including stocks, exchange-traded funds, idiosyncratic savings accounts, and authorities bonds. As of April 2024, it had much than 1.4 cardinal users.

Earlier this year, CNBC reported that the startup's co-founder and CEO, Adam Dodds, had decided to depart the company aft six years astatine the helm. He was replaced by Viktor Nebehaj, the firm's then-chief operating officer.

Freetrade was a beneficiary of the 2020 and 2021 retail banal investing frenzy, which saw GameStop and different alleged "meme stocks" leap to chaotic highs. In the years that followed, Freetrade and its rivals, including Robinhood were impacted by higher involvement rates which hammered capitalist sentiment.

In 2022, Freetrade announced plans to laic disconnected 15% of its workforce. The pursuing year, the steadfast saw its valuation slump 65% to £225 cardinal ($301 million) successful an equity crowdfunding round. Freetrade astatine the clip blamed a "different marketplace environment" for the simplification successful its marketplace value.

More recently, though, things person been turning astir for the startup. Freetrade reported its first-ever fractional twelvemonth of nett successful 2024, with adjusted net earlier interest, tax, depreciation and amortization hitting £91,000 successful the six months done June. Revenues climbed 34% year-over-year, to £13.1 million.

"I'm focused connected scaling Freetrade into the starring commission-free concern level successful the UK market," CEO Nebehaj said successful a connection shared with CNBC. "This woody shows our committedness to capitalise connected opportunities for inorganic maturation to scope that goal."

"Over the past fewer months, we person worked intimately with Stake to guarantee a creaseless modulation and bully outcomes for their UK customers. We look guardant to welcoming them and continuing to enactment them connected their concern journeys."

Freetrade presently manages much than £2 cardinal worthy of assets for U.K. clients. Globally, Stake has implicit $2.9 cardinal successful assets nether administration.

Robinhood, a acold larger subordinate successful the U.S. with $144 cardinal successful assets nether management, launched successful the U.K. successful November 2023 to overmuch fanfare. Earlier this month, the institution launched a securities lending strategy successful the U.K., successful a bid to further entice prospective British clients.