eToro to Go Public via a $10.4 Billion SPAC Deal

By Luigi Wewege Tuesday, March 16, 2021

eToro, a social trading and investing company, said it will go public via a merger with a special acquisition purpose company (SPAC) in a $10.4 billion business deal funded by SoftBank’s Vision Fund 2.

A person checking stock charts on a smartphone and a laptop.

Another Huge SPAC Deal

The SPAC merger with Fintech Acquisition Corp V involves a $650 million investment from head investors like Vision Fund 2, Fidelity Management & Research Co LLC, and Wellington Management.

eToro is an Israeli-based online brokerage company that currently has around 20 million registered users who use the platform to invest in cryptocurrencies, stocks, commodities, exchange-traded funds (ETFs), and more.

The fintech company’s business models place a high focus on social trading, where Investors with less time or experience can copy the trades from other investors who use the platform. eToro’s main rival is Robinhood, a US fintech company behind a popular trading app under the same name.

The SPAC involved in the business deal with eToro is backed by Betsy Cohen, a 79-year old businesswoman who founded Jefferson Bank. Blank-check companies, or SPACs, refer to shell companies that use the proceeds from an IPO (initial public offering) to take private companies public.

“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,” Cohen said in the statement.

“It is now at an inflection point of growth, and we believe EToro is exceptionally positioned to capitalize on this opportunity.”

Fintech Acquisition Corp V SPAC secured $250 million in funding in December, and Cohen has been previously involved with several SPAC mergers, including the business deal that took boutique investment bank Perella Weinberg Partners public.

Last year, eToro welcomed more than 5 million new users and gained $605 million in gross revenue, up 147% from a previous year. The company said it added over 1.2 million new registered users and executed more than 75 million trades in January 2021 alone.

When it comes to cryptocurrencies, Bitcoin represents one of every 25 positions opened on the eToro platform, while investors’ favorite stocks include Tesla, Microsoft, and Apple.

Shares of fintech Acquisition Corp V soared over 15% in pre-open Tuesday.

Summary

Online trading company eToro said it has agreed to go public through a merger with a SPAC led by Betsy Cohen in a $10.4 billion business deal backed by SoftBank’s Vision Fund 2.

About the Author


Headshot of Luigi Wewege

Luigi Wewege is the Senior Vice President and Head of Private Banking at Caye International Bank. Outside of the bank, he serves as an instructor at the FinTech School which provides online training courses on the latest technology and innovation developments within the financial services industry. Luigi is also the published author of "The Digital Banking Revolution."

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