The trading platform eToro announced on March 21 that it had secured $250 million in funding at a $3.5 billion valuation. After failing to go public in 2018 through a particular purpose acquisition company (SPAC) merger, the Israel-based company raised capital for the first time since 2018.
ION Group, SoftBank Vision Fund 2, Velvet Sea Ventures, and some existing investors participated in the round.
According to eToro, the financing results from an Advance Investment Agreement (AIA) signed in early 2021 in conjunction with its proposed SPAC transaction. The AIA is a legal contract between an investor and a company in which the investor agrees to invest in the future.
By signing an AIA, investors and the company agree in advance on the principal terms of the investment. Regarding eToro, the investment would be carried forward two years after the agreement’s execution and subject to certain conditions, including not pursuing a SPAC transaction or raising additional capital. As neither scenario materialised, the AIA agreement proceeded forward.
In 2021, eToro and Fintech V announced the SPAC acquisition with a $10 billion valuation for the trading platform. Nonetheless, the decline in crypto markets has impacted the company’s plans. In July last year, eToro and Fintech V agreed to end the merger.
According to eToro, commissions amounted to $631 million in 2022, a decrease of 49% from 2021 and an increase of just 5% from 2020, when eToro’s revenue reached $605 million. Its SPAC filing anticipated revenues of $2.5 billion in 2025.
Yoni Assia, founder and CEO of eToro, said, “We’ve seen a positive start to the year with markets reacting favorably to ‘less bad’ news and retail trading hitting an all-time high. Year to date, we have seen an improvement in total commissions and profitability compared with the previous quarter with higher engagement and trading activity from our users.”
Last year, despite market volatility, eToro finalised two acquisitions. In August, the company announced the acquisition of the options trading application Gatsby, and in October, it acquired the social investing platform Bullsheet.
