- EToro plans to launch its public listing with Nasdaq by the third quarter.
- The company claims to be the first regulated platform for crypto-assets.
Multi-asset investment and trading platform and Robinhood competitor EToro announcers that it will go public through a merger with SPAC FinTech Acquisition Corp. V at a whopping $10.4 billion. It is a 14-year-old Israeli company that was founded on a “vision of opening up capital markets.” It announced the launch of its platform in the US over 2 years ago and has grown rapidly as of late. Last year the company added over 5 million new registered users. It generated gross revenue of $605 million which represented 147% of year-over-year growth.
In January alone the company has added over 1.2 million new users. It has conducted more than 75 million trades on its platform. Compared to 2019, their monthly registrations averaged around 192000, while it reached 440000 in 2020.
How EToro capitalizes its platform:
EToro says that its platform capitalizes on several secular trends that include the rise of digital wealth platforms. Growing retail participation, and mainstream crypto adoption. The company derived benefits from its recent rise in retail investor interest and consumer investment apps and services to be specific.
This was the result of the so-called “meme stock” activity. It began with Redditors trading GameStop stock to frustrate institutional short sellers. The platform which spans “social” stock trading and cryptocurrency exchange acquired Delta, in November 2019, which happens to be the crypto portfolio tracker app.
The first-ever regulated platform to provide access to crypto-assets:
EToro claims to be one of the first regulated platforms to provide access to crypto-assets. Their platform undergoes regulation in the UK, Europe, Australia, the US, and Gibraltar. The transaction includes commitments for $1 650 million common shares private placement from leading investors which include ION investment group, SoftBank Vision Fund 2, Third Point LLC, Fidelity Management & Research Company LLC, and Wellington Management. The overall $10.4 billion implies the equity value of the merger arrangement. It includes an implied enterprise value for EToro at $9.6 billion.
Currently, EToro takes pride in having over 20 million registered users across 100 countries. Its social community e is quickly expanding due to the growth of its total addressable market. This is supported in part by secular trends which include the growth of digital wealth platforms and increased rise in retail participation.
The company’s future expectations:
The company anticipates receiving approval from FINRA to acquire a broker-dealer license. It also plans to launch stocks in the US within the second half of 2021. In a written statement FinTech V Chairman Betsy Cohen says that its sponsor platform Fintech Masala. It is seeking out companies with “outsized growth, effective controls, and excellent management teams.”
“EToro meets all three of these criteria,” she added. “In the last few years, EToro has solidified its position as the leading online social trading platform outside the U.S., outlined its plans for the U.S. market, and diversified its income streams. It is now at an inflection point of growth, and we believe EToro is exceptionally positioned to capitalize on this opportunity.”