Robinhood Takes Over Ziglu For $100 Million Less Than Initial Offer

Crypto and stock trading platform Robinhood has acquired Ziglu, an application that allows investors to buy and sell cryptocurrencies, for $72.5 million, which is reportedly much lesser than the original $170 million offer.

Ziglu CEO Mark Hipperson told The Block the new deal was signed and approved by the firm's board, as well as by its shareholders. Hipperson believes this is "the best deal for all stakeholders, especially customers."

The first report about the acquisition came in April and the amount remained undisclosed. However, according to documents seen by AltFi, Robinhood wanted to cut back on its previous offer of $170 million to $72.5 million and the Ziglu board had agreed to it.

"Robinhood cited a range of reasons for this change, including the general crypto (winter) market impacting valuations negatively by 50%-90%, the valuation impacts of notable failures including Celsius, BlockFi and Voyager, and ongoing macroeconomic and geopolitical risks," Hipperson told The Block.

The deal can be seen as the second attempt from Robinhood to enter the U.K. market after delaying it in 2020.

"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," Robinhood CEO Vlad Tenev said announcing the deal in a blog post in April.

The total market capitalization of the crypto space has declined by almost 40% since April, which is a major reason why Robinhood is recalculating the amount it can spend for the Ziglu acquisition, CoinGecko reported.

Hipperson reportedly told its shareholders that Ziglu would be left in an "extremely challenging market, and undercapitalized for the period ahead" if Robinhood were to terminate the existing sales and purchase agreement (SPA).

"The board has spent significant time in discussion with Robinhood's CEO and executive team negotiating and improving the terms of their revised offer. Based on these discussions and other considerations, we believe the revised proposal...is the best and only reasonable path forward for the company," Hipperson said.