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The deal comes at a time when money is pouring into online investment platforms, which have surged amid a stock market that returned from a sharp drop in COVID-19 last spring to new highs this week. Volatility is crucial for options investors who are Tastytrade’s primary audience. Investors have flocked to online financial platforms, such as Robinhood, as well as Chicago-based M1 Finance, which raised $ 78 million in two rounds last year and saw its assets under management drop from $ 1 billion. dollars to $ 3 billion last year.
The exact terms of the IG group’s deal were not disclosed. Since Tastytrade is not public, the issues for the executives – and what they have to do with the purchase – are not known.
Ross and Sosnoff have spent the last decade building Tastytrade, best known for its online trading shows. It also includes a trading and brokerage platform called Tastyworks, which originated from Dough, a mobile platform for options trading and education, which was backed by Lightbank, the venture capital fund launched by the Groupon co-founders Eric Lefkofsky and Brad Keywell.
Online brokers such as IG are thriving on volume and Tastytrade has attracted 900,000 registered users.
Tastytrade, headquartered in West Loop, has approximately 145 employees. CTO Sosnoff, Ross and Linwood “Woody” Ma will continue to lead the company. “We don’t expect the leadership on both sides to change, and IG intends to keep the TT brand strong,” Ross said.
The company raised $ 45 million from TCV, a Silicon Valley venture capital firm that previously backed Thinkorswim. IG is paying around $ 300 million in cash and the rest in inventory to acquire Tastytrade.
“From the start, we knew Tastytrade was a very special business,” Sosnoff said in a statement. “While our long-term goal has always been to go global, we waited almost 10 years until we found the right partner and the perfect partner. Together we will focus on empowering the self-directed investor and changing the way people perceive and interact with financial markets.
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