eToro buys US rival Gatsby to expand zero-fee trading offering

abdelaziz Fathi

Israeli social trading and multi-asset brokerage company eToro has secured the regulatory nod to acquire no-fee trading app Gatsby as it aims to expand its business in the US.

The takeover, which is around $50 million in a cash and common stock, was initially filled for approval by the US Financial Industry Regulatory Authority (Finra) back in December 2021.

Co-founded by Jeff Myers and Ryan Belanger-Saleh in 2018, Gatsby is a commission-free options and stock-trading app aimed at younger traders.

Gatsby focuses on a younger demographic to give people “a safe and fair platform to trade on without users having to worry about getting in over their heads or being shut out of names when volatility spikes.”

Gatsby builds upon two open source JavaScript projects for website and web app development. The app launched into iOS and Android in early 2020. Since then, it has seen the number of signups doubling on a yearly basis amid a spike in trade volume with cannabis and meme stocks ranking among its most popular assets.

“We’ve seen a seismic shift in the balance of power away from traditional finance institutions towards the retail investor. The internet has democratized financial information and a sea change has taken place, empowering more everyday investors – particularly Gen Z and Millennials – to trade and invest,” said Yoni Assia, eToro CEO and Co-Founder.

He continues: “These retail investors are looking for opportunities to generate returns in today’s bear market. Against this backdrop, we are incredibly excited to welcome the Gatsby team to the eToro family. We have a shared mission of empowering investors through simple, transparent investing tools. Scaling our U.S. business is a strategic focus for eToro and through Gatsby we can provide U.S. users with access to a safe and simple way to trade options, which we know are particularly attractive in challenging markets.”

The acquisition comes barely a month after eToro laid off 100 employees, half of them in Israel. This number represents around 6% of the company’s total workforce.

At the same time as announcing the cuts, eToro abandoned its plans to go public at an eye-catching $10 billion valuation after it canceled its SPAC deal with Betsy Cohen-backed blank-check firm. Worse still, the social investment work is reportedly in talks to close a private funding round of roughly $1 billion, but at only $5-6 billion valuation.

Read this next

Digital Assets

BlackRock digs further into crypto with metaverse ETF

BlackRock, the world’s largest asset manager with almost $10 trillion in AUM, is set to launch a new metaverse ETF to help investors securely monetize on the booming immersive version of the internet.

Digital Assets

Binance wins license in New Zealand as rival Huobi shutters derivatives

Binance, the world’s largest crypto exchange by traded volume, has obtained licenses to operate in New Zealand, even after rival Huobi shutdown derivatives trading last month due to concerns about regulations.

Retail FX

Hong Kong busts perpetrators of ‘ramp and dump’ scam

Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), has charged thirteen suspects of market manipulation in a joint operation with the local police.

Institutional FX

TradingView integrates market data from German Tradegate exchange

TradingView announced that it ‎has increased data coverage to allow its users to receive information from ‎and get free access to the intra-day and tick data from Tradegate Exchange.

Retail FX

Spotware Systems introduces Custom Push Notifications for cTrader mobile apps

Spotware Systems, a technology provider for the electronic trading industry, is introducing a new push notification feature to alert mobile users of price swings and market fluctuations through their cTrader app.

Market News

The Week Ahead: 30 September from David Madden, Market Analyst at Equiti Group

Sterling dominated the headlines last week, as there were concerns the UK government might struggle to service its debt.

Inside View

How does the quality of signal providers affect your business?

A must-have onboarding process for brokers with investment services like PAMM, MAM, or copy trading

Technology

DBS deploys Nasdaq Trade Surveillance

“The confidence that markets and our clients have in DBS as a safe and trusted banking group is anchored on our ability to detect and respond to anomalous activity, which in turn calls for a robust surveillance and prevention infrastructure.”

Industry News

SEC charges Justin Costello and David Ferraro for securities fraud and posing as billionaire veteran

The Securities and Exchange Commission charged Cannabis executive Justin Costello and David Ferraro, an associate of Costello’s, for promoting the stock of several microcap companies on social media without disclosing their own simultaneous stock sales as market prices rose.

<