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London-based online trading platform Freetrade told CNBC Tuesday that it’s agreed to buy the U.K. customer book of Stake, an Australian investing app.
The move is part of a broader bid from Freetrade to bolster its domestic business and comes as British digital investment platforms face rising competition from new entrants — not least U.S. heavyweight Robinhood.
The startup told CNBC exclusively that it entered into a transaction with Stake to take on all of the company’s clients and move all assets the firm manages in the U.K. over to its own platform.
Freetrade and Stake declined to disclose financial information of the deal, including the value of Stake’s U.K. customer book.
Stake, which is based in Sydney, Australia, was founded in 2017 by entrepreneurs Matt Leibowitz, Dan Silver and Jon Abitz with the aim of providing low-cost brokerage services to retail investors in Australia.
The company, which also operates in New Zealand, launched its services in the U.K. in 2020. However, after a recent business review, Stake decided to focus primarily on its Australia and New Zealand operations.
Following the deal, customers of Stake U.K. will be contacted with details about how to move their money and other assets over to Freetrade in “the coming weeks,” the companies said. Customers will still be able to use their Stake account until assets and cash are transferred to Freetrade in November.
Freetrade operates primarily in the U.S. but has sought to expand into the European Union. It offers a range of investment products on its platform, including stocks, exchange-traded funds, individual savings accounts, and government bonds. As of April 2024, it had more than 1.4 million users.
Earlier this year, CNBC reported that the startup’s co-founder and CEO, Adam Dodds, had decided to depart the company after six years at the helm. He was replaced by Viktor Nebehaj, the firm’s then-chief marketing officer.
Freetrade was a beneficiary of the 2020 and 2021 retail stock investing frenzy, which saw GameStop and other so-called “meme stocks” jump to wild highs. In the years that followed, Freetrade and its rivals, including Robinhood were impacted by higher interest rates which hammered investor sentiment.
In 2022, Freetrade announced plans to lay off 15% of its workforce. The following year, the firm saw its valuation slump 65% to £225 million ($301 million) in an equity crowdfunding round. Freetrade at the time blamed a “different market environment” for the reduction in its market value.
More recently, though, things have been turning around for the startup. Freetradereported its first-ever half year of profit in 2024, with adjusted earnings before interest, tax, depreciation and amortization hitting £91,000 in the six months through June. Revenues climbed 34% year-over-year, to £13.1 million.
“I’m focused on scaling Freetrade into the leading commission-free investment platform in the UK market,” CEO Nebehaj said in a statement shared with CNBC. “This deal shows our commitment to capitalise 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 more than £2 billion worth of assets for U.K. clients. Globally, Stake has over $2.9 billion in assets under administration.
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Check out the companies making headlines in midday trading. Novavax – Shares plunged more than 17% after the biotech company said the Food and Drug Administration put a clinical hold on its application for a Covid and influenza combination shot as well as a standalone flu vaccine. United Airlines – The stock soared 11% after the airline posted an earnings and revenue beat for the third quarter and guided for a strong fourth quarter. In addition, United said it is starting a $1.5 billion share buyback, its first since before the Covid pandemic. Morgan Stanley – Shares popped 7% after the bank reported quarterly results that beat Wall Street’s forecasts , boosted by higher profits from its wealth management, trading and investment banking divisions. The firm posted earnings of $1.88 per share, higher than the $1.58 expected by a LSEG analyst poll. Revenue was $15.38 billion versus the $14.41 billion consensus estimate. Cisco Systems – The technology networking stock advanced 3.3% to a 52-week high on the back of a Citi upgrade to buy from neutral. Citi said artificial intelligence can become a larger part of the business over time. Novocure – The stock rose 2.1% on the heels of the Food and Drug Administration’s approval of the company’s wearable treatment for metastatic non-small cell lung cancer, known as Optune Lua. ASML – Shares of the semiconductor equipment maker slumped 5.8%, building on a 16% loss from Tuesday after the Dutch company mistakenly released its third-quarter earnings earlier than expected . ASML Holding cut its sales outlook for 2025, citing a slower-than-expected recovery in segments beyond AI. J.B Hunt Transport Services – Shares added 3.4% after the company posted a top and bottom line beat. J.B. Hunt posted $1.49 earnings per share on $3.07 billion of revenue in the third quarter. Analysts polled by LSEG had forecast $1.41 in earnings per share on $3.02 billion of revenue. The company said demand for its intermodal service rose throughout the quarter. Aspen Aerogels – Shares gained 11% after the company announced that it received a conditional commitment for a proposed Department of Energy loan of up to $670.6 million. Aspen Aerogels also released preliminary results for the third quarter. For the period, the company is expecting revenue of around $117 million and adjusted EBITDA of around $25 million, above the $95.1 million in revenue and $14.1 million in adjusted EBITDA that analysts polled by FactSet were expecting. Prologis – The warehouse giant rose more than 4% after posting better-than-expected quarterly results . For the third quarter, Prologis reported core funds from operations of $1.43 per diluted share, above the $1.37 estimate from FactSet. In a statement, CEO Hamid Moghadam said: “Looking ahead, the supply picture is improving, and the long-term demand drivers for our business remain strong.” U.S. Bancorp – The stock moved more than 4% higher after U.S. Bancorp’s third-quarter earnings beat estimates, posting $1.03 per share versus the 99 cents per share that analysts were expecting, per LSEG. Revenue, however, missed estimates, coming in at $6.86 billion compared to the consensus estimate of $6.9 billion. General Motors – Shares increased more than 2% on the heels of the automaker’s agreement with Lithium Americas Corp. to establish a joint venture. The deal includes General Motors giving $625 million in cash and credit to the Canadian mining business. — CNBC’s Alex Harring, Hakyung Kim, Samantha Subin, Pia Singh and Michelle Fox contributed reporting.
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