Stock trading app Freetrade crashes with a 65% drop in value

Freetrade founders Adam Dodds and Victor Nebehay have seen their business values ​​plummet as market conditions tighten. Credit: FREETRADE

Equities start trading -up Freetrade cuts its valuation by 65% ​​amid massive selloffs among fintech companies and slowing markets.

The money-losing investment app is gearing up for a crowdfunding campaign that will value the business at £225m, nearly two-thirds down from the previous £650m valuation in November 2021.

The markdown comes amid a sharp falling values ​​of competitors and sharp revaluations of tech companies around the world as interest rates rise.

Robinhood, an $8.5bn (£6.7bn) US equity trading giant, has since Since the company went public in July 2021, its share price has fallen by 70 percent.

In April, Schroders halved the value of their investment in Revolut, which also offers merchant accounts.

Many of these consumer trading and finance apps flourished during the lockdown as people with money to spare looked for ways having fun while stuck at home.

However, rising interest rates and the lifting of restrictions on activities have led to a sharp change in this trend.

Competitive trading platform CMC Markets said Tuesday it sees “weaker” investment returns as a result of “sluggish market conditions.”

Freetrade, which is backed by London-listed Molten Ventures and New York-based fund Left Lane, has released its new estimate ahead of a crowdfunding round scheduled for late June.

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The company, which provides free buying and selling of thousands of shares, has previously raised more than £110m. The company has about 700,000 customers and £1.4bn of assets under management.

Freetrade lost £3.3m in the first three months of the year on £4.7m in revenue. The company began a series of layoffs last summer to cut costs.

Ahead of a meeting with the company's crowdfunding investors, chief executive Adam Dodds said: “We've seen the longest bull market in history come to an end and public company valuations plummet. .

“Free trade is no different. We are now operating in a different market environment where we need to prioritize profitability.

“We have arrived at a valuation for this round in line with the valuation decline we have seen in the open market. colleagues.”

The Telegraph reported that Freetrade was exploring a possible sale last year and was considering hiring consultants to explore options.

Sky News reported in December that initial talks with JP Morgan were unlikely to move forward.