As Investors Go Out, Free Trade Fails To Secure A Higher Valuation

The deal-funding agreement was canceled earlier in January.

It eventually raised £30 million from existing investors in the form of a convertible loan.

The Financial Times reported on Tuesday that Freetrade, a UK-based stock trading platform, failed to attract new investors at a higher value earlier this year when tech stocks plummeted.

The trading business inked term sheets with fresh investors for a £700 million investment round last January, but the transaction was called off.

“During the advanced phases of this transaction, the macro-environment unexpectedly reversed, and the venture markets froze up.” “The agreement did not close,” Freetrade's CEO, Adam Dodds, claimed in a letter obtained by the magazine that was issued to the company's shareholders who participated in its crowdfunding.

However, the firm has made no public announcement about the failed investment round.

Due to the inability to achieve a fresh value, the business was forced to seek a £30 million convertible loan from current investors last May. Then it received £5 million in funding from Left Lane and Molten, two of its main investors.

In a crowdfunding round that ended in November, the business was valued at £650 million in pre-money.

“The value reflected a roughly 30x multiple on our yearly revenue run-rate, which was substantially in line with public market valuations at the time for consumer fintech firms on a comparable development path,” stated the CEO.

In the fiscal year 2021, which concluded on September 30, the trading platform made £12.7 million in revenue. The result was 647 percent greater than the previous year's income of £1.7 million. It did, however, incur a pre-tax loss of £18.2 million.

Freetrade is headquartered in the United Kingdom and is currently growing its presence inside the European Economic Area. It has already penetrated many European nations and wants to expand further.

An FCA decision earlier this year required the corporation to take down its social media campaign, labeling the messages as misleading.'

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