eToro announces SPAC merger at $10.4b valuation

The Israeli trading platform is set for a Wall Street flotation by merging with Betsy Cohen's FinTech Acquisition Corp. V.

Israeli trading platform eToro has announced that it is going public via a merger with a special purpose acquisition company (SPAC) at an estimated company valuation of $10.4 billion. The deal is with a SPAC or blank check company called FinTech Acquisition Corp. V, of which serial dealmaker Betsy Cohen is chairperson. 

The deal includes commitments for a $650 million common share private placement from leading investors including ION Investment Group, Softbank Vision Fund 2, Third Point LLC, Fidelity Management & Research Company LLC, and Wellington Management. 

eToro has 20 million registered users worldwide including 5 million who were added in 2020. The company has 1,100 employees including 700 in Israel.

Fintech Acquisition Corp. V , which raised $250 million in December, has a market value of about $366 million.

eToro Group Ltd., which was selected in 2013 by "Globes" as one of Israel's most promising startups, was founded in 2007 by brothers Yoni and Ronen Assia and David Ring with the vision of developing a platform that would open the financial markets to everyone by simplifying the user’s experience. eToro then developed a contracts for difference (CFD) trading platform. The company's platform allows trading in all assets including securities, foreign currencies and cryptocurrencies like bitcoin. eToro's last major financing round was in 2018 when it raised $100 million at a company valuation of $800 million.

eToro offers zero-commission trading and profits from spread between the price paid for securities and the price passed along to customers. As a "social trading" network, investors can share their opinions and market exploits.

eToro CEO Yoni Assia said, "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. Our users come to eToro to invest, but also to communicate with each other; to see, follow, and automatically copy successful investors from all around the world. We created a new category of wealth management - social investing - and we are dominating the market as evidenced by our rapid expansion."

He added, "Today marks a momentous milestone for eToro as we embark on our journey to become a publicly traded company with Betsy Cohen and the team at FinTech V. 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."

FinTech V chair Betsy Cohen said, "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 US market, and diversified its income streams. It is now at an inflection point of growth, and we believe eToro is exceptionally positioned to capitalize on this opportunity."

Yesterday, "Bloomberg" reported that Israeli app monetization company IronSource is in talks to merge with a SPAC called Thoma Bravo Advantage, at a valuation of $10 billion.

Published by Globes, Israel business news - - on March 16, 2021

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