A UK-based stock exchange platform, Freetrade, met the unexpected after failing to allure new investors at a higher valuation at the start of 2022. The tech stocks, however, were noted to thrust at the moment. This is according to the report released by The Financial Times on Tuesday.
The exchange signed leading policy documents with new backers for a funding deal at a £700 million valuation. The deal signed was later written off in January.
In a letter, Freetrade’s CEO, Adam Dodds noted that “During the advanced stages of this deal, the macro-environment began to reverse abruptly, and venture markets seized up. The deal did not complete.”
The letter was issued to the company’s shareholders who participated in crowdfunding and was seen by the publication.
The entity has yet to disclose its funding round failure to the public or publish it internally.
The Saving Kicks
In an effort to jump-start the hitch after the failure to attain a new valuation, the company decided to secure £30 million from existing investors as a convertible loan. Later on, Freetrade was backed by two of its reviving backers, Left Lane and Molten, each party wiring £5 million.
In a crowdfunding round that closed last November, the startup was valued with a pre-money tag of £650 million.
“The valuation represented a c. 30x multiple on our annualized revenue run-rate, broadly in line with public market valuations at the time for consumer fintech businesses on a similar growth path,” the CEO said.
The financial year ended on September 30, 2021, and reflected a revenue of £12.7 million made by the platform. The numbers represented 647% up from £1.7 million realized in the previous year. The company, however, experienced a pre-tax loss of £18.2 million.
At the start of 2022, the brokerage took down its social media campaign by an FCA order.
Freetrade has planted its roots firmly in Europe, aiming to dominate the market in the region. More offices are set to be opened to serve the clients and reach more grounds.