In the latest major Chicago tech acquisition, fintech startup tastytrade will be acquired by online trading platform IG Group in a $1 billion deal.
The deal includes $300 million in cash and 61 million IG shares, which are valued at $700 million.
Founded in 2011, tastytrade is the owner of tastyworks, a high-speed technology brokerage firm, and dough, a mobile-first brokerage firm. It also operates a popular online financial media network that offers live and interactive trading content to retail traders. Its media business is seen by traders across 190 countries.
The startup was founded by Kristi Ross and Tom Sosnoff, who both previously led thinkorswim, which was acquired by TD Ameritrade in 2009 for more than $600 million. The management teams for IG and tastytrade will remain the same, according to a news release, and the tastytrade platform is expected to remain the same.
"We created tastytrade with a vision to challenge self-directed investors to think and trade strategically," Ross said in a statement. "We built an ecosystem to empower them. No other firm has built a retail trader ecosystem in quite the same way: delivering authentic, fun and actionable research-based content through our uniquely developed financial media network; to our two revolutionary brokerage firms with intuitive front-end technology, built on high frequency middleware; to a retail-focused futures exchange."
Tastytrade last raised $20 million in 2018 in a round led by TCV, a Silicon Valley-based venture capital firm. The round brought its total raised to nearly $60 million, the company said at the time. The startup has around 145 employees.
Billion-dollar acquisitions are rare in Chicago's tech scene. Others to hit the milestone include Cleversafe's $1.3 billion deal to IBM, Fieldglass' $1 billion sale to SAP, ExteNet Systems' buyout by Digital Bridge Holdings for $1.4 billion, and Coyote Logistics' $1.8 billion deal with UPS. Grubhub was also acquired last year by Netherlands-based Just Eat for $7.3 billion in an all-stock deal.
IG, a London-based online trading platform, said the deal will significantly increase its footprint into the U.S. derivatives market. The deal is expected to close in the first quarter of IG’s financial year, the company said.
