Earlier this year, Robinhood (NASDAQ:HOOD) made a big announcement regarding expanding services across the Atlantic. The social investment platform announced the acquisition of Ziglu in the UK – an FCA-regulated e-Money platform and crypto asset provider. All subject to regulatory approval, of course.
A few days back, it was reported in sifted that Robinhood wants to continue with the purchase but at a steep discount to the originally agreed-upon price. Apparently, Robinhood wants to pay just $72.5 million for Ziglu – less than half of the original price of $170 million.
The report cited a missive from Ziglu CEO and co-founder Mark Hipperson who claimed the crypto winter was to blame, and they had spent considerable time chatting with Robinhood to agree on the slashed sale price. Reportedly, the other options of raising more money and/or slashing costs. These options were apparently viewed as less desirable than a discounted price in a challenging environment.
When the deal was announced, Ziglu was touted as a crowdfunding success, having raised funding from several online offerings – thus enabling retail investors to gain access to the promising young firm. The last round in 2021 listed on Seedrs pegged a pre-money valuation on Ziglu of £85 million – far above what is being paid now. These investors may now receive a loss on the investment that was at one point a possible gain. At least the securities offering was EIS qualified, which mitigates some of the loss.
While a loss on an investment is never fun, something is better than nothing at all.
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