eToro going public via SPAC with implied equity value of $10.4 billion

Rick Steves

The transaction includes $250 million in gross proceeds from FinTech V’s cash in trust and $650 million in gross proceeds from a fully committed private placement in public equity (“PIPE”) at $10.00 per share from a number of investors. Existing equity holders will retain 91% ownership.

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Israel-based online platform eToro has announced it will go public with ‘SPAC’ Fintech V with an estimated implied equity value of approximately $10.4 billion.

The combined company will operate as eToro Group Ltd. and is expected to be listed on NASDAQ.

Founded in 2007, the social investment network offers commission-free fractional equities to cryptoassets, and a choice of how to invest, including a smart portfolio and copy trading.

The trading company has reported 147% growth YoY of gross revenues in 2020 as the COVID-19 pandemic pushed many towards their trading accounts. eToro has even added over 5 million new registered users in 2020 and boasts over 20 million registered users at the moment.

In 2019, monthly registrations averaged 192,000. In 2020, that grew to 440,000, and in January 2021 alone eToro added more than 1.2 million new registered users to the social network.

In 2019, eToro executed 8 million trades per month on average. That number grew to 27 million in 2020, and in January 2021 alone eToro saw more than 75 million trades executed on the eToro platform.

Yoni Assia, Chief Executive Officer of eToro, 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.”

“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”, Assia added.

Betsy Cohen, Chairman of the Board of Directors of FinTech V, 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 U.S., outlined its plans for the U.S. 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.”

eToro Group is expected to have an estimated implied equity value of approximately $10.4 billion at closing, reflecting an implied enterprise value for eToro of approximately $9.6 billion. The company is expected to have approximately $800 million net cash on its balance sheet to support future growth.

The transaction includes $250 million in gross proceeds from FinTech V’s cash in trust and $650 million in gross proceeds from a fully committed private placement in public equity (“PIPE”) at $10.00 per share from a number of investors, including ION Investment Group, Softbank Vision Fund 2, Third Point LLC, Fidelity Management & Research Company LLC, and Wellington Management.

Existing eToro equity holders, including current investors and employees of the firm will retain approximately 91% ownership in a deal that is targeted to close in the third quarter of 2021.

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