eToro revenue halves in 2022, valuation drops to $3.5 billion

The company generated $631 million in revenue for the full-year 2022, down 47 percent year-on-year from $1.2 billion in 2021.

In addition, the report outlines eToro had 31.4 million in total users and 2.8 million funded accounts as of December 31, 2022. That compares to 27 million users and 2.4 million funded accounts in 2021. Assets under administration (AUA) also stood at $5.8 billion in Q4 2022, down from $10.7 billion a year earlier.

Trading commissions generated from crypto trading accounted for 19 percent of the total commissions eToro earned in 2022, compared to nearly two thirds the previous year.

eToro has been among the biggest beneficiaries of the retail investing COVID-19 boom. While eToro’s social investing product did most of the success since its inception 16 years ago, cryptocurrency trading on the platform took off.

Meron Shani, eToro CFO, said: “At eToro we need no reminder that markets are cyclical. It’s also worth noting that we were not impacted by the liquidity concerns which plagued many in the crypto industry. Our underlying business is profitable and our balance sheet is strong. Total commissions for 2022 were $631 million, down versus our stellar performance in 2021, yet up 5% versus 2020.”

Other highlights shows that eToro completed funding round of $250 million at a valuation of $3.5 billion. The company abandoned its plans to go public even after it lowered its SPAC valuation down to $8.8 billion from the earlier planned $10.4 billion, as market conditions changed and SPACs face more headwind. Worse still, the social investment work was reportedly in talks to close a private funding round of roughly $1 billion, but at only $5-6 billion valuation.

Going public through a blank-cheque company was originally scheduled for a Q3 2021 closing. However, meeting investors to pitch a direct listing has hit a bump and the deadline was pushed back to the fourth quarter as the SPAC boom was already fading away.

On a last-ditch attempt, eToro pushed back the completion of its reverse merger deal with the blank-check company backed by Betsy Cohen. Specifically, the deal deadline was extended from the earlier anticipated close on December 31, 2021 to June 30, 2022. Despite their ‘best efforts’, the parties haven’t satisfied the requisite closing conditions set forth in the original merger agreement, including eToro’s registration statement on Form F-4 to be effective.

“Last year, retail investors endured a tumultuous year and for many their first ever bear market. While their short-term tactics may change in response to the market environment, they remain committed to their long term goals. Our 2023-2025 strategy focuses on scaling our brokerage business in our key markets and increasing profitability via revenue growth and cost management.” commented eToro CEO and co-founder Yoni Assia.