The Robinhood Markets share price gained 5.2% yesterday after the Nasdaq-listed trading app announced the acquisition of British cryptocurrency business Ziglu. The deal is expected to finally see the highly anticipated entry of the company onto the UK market.
Robinhood offers users low cost and free options to trade a variety of financial instruments from traditional stocks to CFDs that also cover cryptocurrency, forex can commodity markets. It launched in the USA to high acclaim in 2013 and was credited with democratising trading and investing by making them affordable and accessible to a wider audience.
Robinhood Markets went public last summer through an IPO that sold shares at $38 and valued the company at $32 billion. The company suffered a backlash when it suspended trading of the most popular, and volatile “meme stocks” including GameStop in early 2021. The stocks had been targeted by an army of small traders coordinating themselves via online forums, particularly Reddit to gang up on hedge funds holding short positions by driving prices higher.
Robinhood was accused of betraying the users it claimed to support in favour of the financial establishment after its public listing. The tech company has, like many growth stocks in the broader tech sector, also suffered from a tough start to 2022, losing 37% of its value since the beginning of the year. Its valuation has shed around 67% since listing last summer and Robinhood stock currently trades at $11.56 compared to the IPO price of $38.
The company will hope that entry into a large new market like the UK will help revive its fortunes. It hasn’t been announced how much Robinhood will pay for London-based Ziglu but the start-up was valued at £85 million last year while fundraising via crowdfunding platform Seedrs. Investors who participated in that round have also yet to be informed of the price agreed.
Ziglu is itself a trading app but purely focused on popular cryptocurrencies including bitcoin, ethereum and litecoin. It was founded by former Starling Bank founder Mark Hipperson who also remains as chief executive and the company’s majority shareholder. He looks set for a major windfall thanks to the sale, which represents Robinhood’s first international expansion.
Robinhood chief executive and co-founder Vlad Tenev commented:
“Ziglu’s impressive team of deeply experienced financial services and crypto experts will help us to accelerate our global expansion efforts.”
Robinhood said that Ziglu users won’t immediately experience any changes but that the longer term plan was to
“integrate Ziglu more fully into Robinhood, bring the Robinhood brand overseas, and work to expand operations beyond the UK into Europe.”
