eToro confirms plans to merge with a Spac at $10bn valuation
Investment platform eToro has confirmed plans to merge with a special acquisition company after years of speculation about going public.
The London-based firm announced it had agreed to merge with Fintech Acquisition Corp. V in a deal which values eToro at around $10.4bn. The companies are raising approximately $650m in equity.
Established in 2007 by two brothers Yoni and Ronen Assia, the Israeli company now boasts 20m registered users worldwide.
Its decision to go public coincides with a surge in interest for commission-free trading apps, largely due to the pandemic-induced market volatility and increased interest in cryptocurrencies.
Last year eToro said it added 5m new registered users and generated gross revenues of $605m, representing YOY growth of 147 per cent.
“We founded eToro with the vision of opening the global market for everyone to trade and invest in a simple and transparent way,” eToro chief executive Yoni Assia said. “We created a new category of wealth management – social investing – and we are dominating the market as evidenced by our rapid expansion.”
There had been reports towards the end of 2020 that eToro was planning an IPO at a valuation of $5bn. Since then the appeal of blank-cheque vehicles, also known as a Spac, has grown hugely particularly in the US as they are considered a quicker way to go public.
There have been 258 Spacs worldwide this year alone, surpassing the full year annual record of 256 set during 2020 in just 10 weeks.
The Spac phenomenon has attracted big names across industries from Sir Richard Branson to LVMH founder Bernard Arnault.
“In the last few years, eToro has solidified its position as the leading online social trading platform outside the US, outlined its plans for the US market, and diversified its income streams,” Betsy Cohen, chairman of the board of directors at Fintech V said. “It is now at an inflection point of growth, and we believe eToro is exceptionally positioned to capitalize on this opportunity.”