Investment and trading platform eToro has agreed to go public through a merger with special purpose acquisition company (SPAC) FinTech Acquisition Corp. V that will see it notch up a market value of US$10.4bn.
The Israeli firm said on Tuesday it is expecting to trade on the Nasdaq exchange under the name eToro Group Ltd and is aiming to capitalise on a number of “secular trends” including the rise of digital wealth platforms, growing retail participation, and mainstream crypto adoption.
READ: Coinbase valuation reaches US$90bn ahead of public listing
The merger with the SPAC includes commitments for a US$650mln private share placement from leading investors including SoftBank’s Vision Fund 2, Third Point LLC and Fidelity Management & Research.
eToro also reported that it had added over 5mln new users to its platform in 2020 and generated gross proceeds of US$605mln, year-on-year growth of 147%.
The company also highlighted that momentum was “accelerating” into 2021, highlighting the emergence of “a new generation of investors” discovering the market.
“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”, the company said, adding that in January alone over 75mln trades had been executed on its platform compared to 27mln on average per month in 2020.
“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…Today marks a momentous milestone for eToro as we embark on our journey to become a publicly traded company”, eToro chief executive Yoni Assia said in a statement.
The surge in trading activity on eToro’s platform earlier this year has been reflected across its peers in the space such as Robinhood as multiple factors including the meteoric rise of Bitcoin as well as the trading frenzy surrounding video game retailer GameStop Corp (NYSE:GME) having drawn in thousands of new retail investors that can easily trade assets commission-free through mobile phone apps.
Crypto trading platforms, in particular, seem keen to join the recent flurry of stock market flotations, with crypto exchange firm Coinbase planning a direct listing on the Nasdaq later this month which is expected to see it valued at around US$90bn.
Meanwhile, fellow crypto exchange Kraken is also reported to be considering going public next year, either through a SPAC merger or an initial public offering (IPO).