Robinhood (NASDAQ:HOOD) revealed it has canceled the acquisition of Ziglu, a UK Fintech that opened the door to a new market. Ziglu holds an e-money license and is regulated by the UK Financial Conduct Authority. Ziglu provides crypto trading in the UK as well as other features such as cash accounts.
Robinhood announced the acquisition in April of 2022, stating:
“As we look to expand internationally, we’re excited to announce that we’ve signed a deal to acquire Ziglu Limited, a UK-based electronic money institution and cryptoasset firm, subject to regulatory approvals and other customary closing conditions. With Ziglu, UK-based customers can buy and sell eleven cryptocurrencies, earn yield via its ‘Boost’ products, pay using a debit card, and move and spend money, even abroad, without fees. Like Robinhood, Ziglu believes that the new era of digital money brings a multitude of opportunities, and Ziglu exists to make those opportunities accessible to everyone. Their talented team and technology will help us accelerate our international expansion, both in the UK and across Europe.”
Robinhood called Ziglu’s management team “impressive,” sharing a set of “common goals.” Ziglu founder and CEO Mark Hipperson, said by joining Robinhood they would be able to “supercharge Robinhood’s expansion across Europe and bring better access to crypto and its benefits to millions more customers.”
A few months later, in August 2022, the deal was renegotiated from a reported $170 million to less than half that amount of $72.5 million.
Yesterday, Robinhood said that it was canceling the deal to acquire Ziglu. Robinhood disclosed the move during its Q4 2022 earnings report, which highlighted a challenging environment for the Fintech.
Robinhood said that “after careful consideration,” it had terminated the deal to acquire Ziglu, which included a $12 million charge which was booked during the 4th quarter.
A footnote in the earnings release stated that “Partially as a result of the termination of the stock purchase agreement, which occurred in February 2023, the advances made to Ziglu accounted for as non-marketable equity securities were impaired to a carrying value of zero.”
Ziglu has not issued a statement on the decision as of this writing.