Robinhood Rival EToro To Go Public Via $10.4 Billion SPAC Merger

Social investment network eToro plans to go public through a merger with a blank check company FinTech Acquisition Corp. V backed by Betsy Cohen, founder and the former CEO of The Bancorp.

Announced today, the combined enterprise, valued at $10.4 billion, will operate as eToro Group Ltd. and is expected to list on the Nasdaq
NDAQ
stock exchange, with approximately $800 million in cash on its balance sheets. The deal, set to close in the third quarter, was led by investors including ION Investment Group, Softbank Vision Fund 2, and Fidelity Management & Research Company LLC. Assuming no redemptions by FinTech V’s stockholders, existing eToro equity holders will retain approximately 91% ownership of the company immediately following the merger. 

“eToro is a truly diversified, multi-asset investment platform but we are big believers in crypto and the blockchain technology that underpins it,” said CEO and co-founder of eToro Yoni Assia. “We are excited to see the continued mainstream adoption of crypto.” 


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Tel-Aviv-based eToro was founded in 2007 as a social trading platform where retail investors can trade a variety of assets including stocks, ETFs, and cryptocurrencies. The platform also offers a choice of investing strategies: direct investment, through a “smart” algorithm-based portfolio of 15 Nasdaq listed stocks picked by well-performing investors, or even by copying the investment strategy of successful investors on the platform. The company was one of the first regulated brokerages in Europe to offer bitcoin in 2013. In 2019, eToro launched crypto and social trading operations in the U.S. Last summer, the firm received approval from FINRA for a broker dealer licence and is emerging as Robinhood’s rival on a commission-free stock trading market.

In 2020, eToro added more than 5 million users and generated gross revenue of $605 million, a year-over-year growth of 147%, according to the statement. Its monthly rate of 27 million trades in 2020 has more than doubled: over 75 million trades were executed this January alone. The platform currently has approximately 20 million users from more than 100 countries.

“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,” said Betsy Cohen in a statement. Cohen is now one of the SPAC merger champions. Most recently, her blank-check company FTAC Olympus Acquisition Corp announced it’s taking public payments-focused fintech Payoneer in a $3.3 billion deal.

eToro is the latest cryptocurrency firm in a race to go public. In January, it was reported New York Stock Exchange-owner ICE would be taking its cryptocurrency venture Bakkt public, also through a SPAC merger. The same month, Coinbase, the largest cryptocurrency exchange in the U.S., confirmed its intention to go public via a direct listing on Nasdaq. As an increasing number of institutional and accredited investors start taking crypto seriously, the dearth of publicly traded companies has limited the kinds of investment opportunities.


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