Robinhood reportedly said on Tuesday that it had agreed to acquire London-based fintech app Ziglu, which allows users to trade several types of cryptocurrencies, such as Bitcoin. The company said the acquisition would help its expansion plans in the UK and Europe. About two years ago, Robinhood suspended plans to roll out in the UK. At the time, the company said its domestic business development had prioritized international expansion.
After the news was announced, Robinhood’s stock price rose more than 5% on Tuesday. The deal could be a crucial boost to Robinhood’s growth prospects. Robinhood’s performance has slipped since last year’s GameStop trading frenzy.
Robinhood reported that monthly active users in the fourth quarter of 2021 fell to 17.3 million from 18.9 million in the previous quarter, and said it expects revenue of less than $340 million in the first quarter of 2022, down 35% year-over-year. Since going public on the NASDAQ last summer, the company’s market value has shrunk by about two-thirds.
Robinhood CEO and co-founder Vlad Tenev said the acquisition of Ziglu “will help us accelerate our global expansion.”
In a blog post, Tenev said: “We will work with the Ziglu team to leverage the strengths of both companies, explore new ways to innovate and break down barriers for customers across the UK and Europe.”
The specific terms of the acquisition have not been disclosed. Robinhood said the deal also needs regulatory approvals and compliance with other regular closing conditions.
Founded in 2018, Ziglu allows users to make payments, invest in a range of cryptocurrencies, and earn interest on holdings in Bitcoin and British pounds.
To date, the company has raised £17.5 million (about 145 million yuan), including £13.4 million from retail investors through the equity crowdfunding platform Seedrs. The final valuation of the transaction was £85 million (about 700 million yuan).
It is one of the few cryptocurrency companies successfully registered with the Financial Conduct Authority in the UK. Registration is a key requirement for digital asset companies looking to operate in the country.
Ziglu CEO Mark Hipperson was a co-founder of the British digital bank Starling. Ziglu and Robinhood “share a common set of goals,” he said.
“As part of Robinhood, we will drive Robinhood’s expansion in Europe and provide millions of customers with better access to cryptocurrencies and benefit them,” Hepperson said.