UK trading platform eToro to go public in $10bn SPAC deal
The trading and investment fintech saw more than 75m trades on its platform in January 2021 alone.
The Israeli fintech announced it would go public at a valuation of $10.4bn after merging with FinTech Acquisition Corp. V (FinTech V), a publically-traded SPAC run by American businesswoman Betsy Cohen.
A SPAC (special-purpose acquisition company) is a way for companies to go public without going through all the hassle and expense of an IPO (initial public offering).
Cohen founded Bancorp, a bank holding company based in Minneapolis, in 1999 and subsequently FinTech V, which raised $250m when it listed on the NASDAQ in December 2020.
As part of the deal, eToro will receive $250m raised in FinTech V’s IPO as well as $650m from a group of individual investors, including the likes of Fidelity, Softbank Vision Fund 2 and Third Point LLC, which has invested in the likes of Square, Alibaba and Facebook.
“I want to express my gratitude for the passion, hard work, drive and determination of all of the eToro team members over the past 14 years who have helped make this a reality.”
Founded in 2007 with the view of opening up capital markets to the everyday investor, eToro has amassed over 20m registered users across the globe.
Betsy Cohen, Chairwoman of the Board of Directors of FinTech V, added: “As a pioneer in the evolution of SPACs, Fintech Masala, our sponsor platform, seeks out companies with outsized growth, effective controls and excellent management teams. eToro meets all three of these criteria.”
“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 U.S. market, and diversified its income streams.”
Following the closing of the transaction, the two companies expect to be listed on NASDAQ and will operate as eToro Group Ltd.
In 2020, eToro added more than five million users and generated $605m in revenues, a growth of 147 per cent on the year before.
As a result of its rapidly expanding customer numbers, eToro facilitated more than 75m trades on its platform in January 2021 alone.