UPDATED 21:30 EDT / MARCH 16 2021

BLOCKCHAIN

SPAC merger will take eToro public with a valuation of $10.4B

Social trading and investment marketplace eToro Group Ltd. is the latest company set to go public with an announcement today that it will merge with special-purpose acquisition company FinTech Acquisition Corp. V.

As part of the deal, FinTech V will contribute $250 million to eToro, while a further $650 million will be invested into the company via a fully committed private placement in public equity from investors ION Investment Group, Softbank Vision Fund 2, Third Point, Fidelity Management & Research and Wellington Management. The deal will value the combined company at $10.4 billion.

Founded in 2007, eToro offers a social investment network that allows users to watch the financial trading activities of other users, copy them and make their own trades. The company offers a variety of tools to allow traders to learn from each other, share live trading information and leverage their collective power.

While originally founded as a stock trading platform, the company has moved heavily into the cryptocurrency market after launching a cryptocurrency trading service in the U.S. in March 2019 initially with support for 14 cryptocurrencies. eToro followed up in April 2019 with a cryptocurrency trading service called eToroX that targets professional traders.

EToro’s entry into the cryptocurrency market couldn’t have been timed better given the precipitous rise of bitcoin over the last 18 months. With its support for cryptocurrencies — combined with a rise in amateur and day trading both in cryptocurrency and regular shares through 2020 thanks to the COVID-19 pandemic and the shift to remote working — eToro has thrived. The company added more than 5 million new registered users in 2020 and generated gross revenues of $605 million, up 147% over the previous year.

The company’s growth momentum isn’t slowing into 2021 either. Having seen 192,000 new registrations per month in 2019 and 440,000 per month in 2020, eToro added 1.2 million new registered users in January alone. In addition, in 2019 eToro was processing 18 million trades a month, 27 million a month in 2020, and then processed 75 million trades in January alone.

“We founded eToro with the vision of opening the global market for everyone to trade and invest in a simple and transparent way. Today, eToro is the world’s leading social investment network,” Yoni Assia, chief executive officer of eToro, said in a statement. “We created a new category of wealth management – social investing – and we are dominating the market as evidenced by our rapid expansion.”

Coming into its entry into public markets via SPAC merger, eToro had previously raised $272.7 million in venture capital funding, according to data from Crunchbase. Notable investors include Bracket Capital, China Minsheng Financial Holdings, Korea Investment Partners, SBI Group, World Wide Invest and Digital Currency Group.

Image: 30478819@N08/Flickr

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