eToro raises $250M after terminating SPAC deal

Trading level eToro has secured $250 cardinal successful backing astatine a $3.5 cardinal valuation, the company announced connected March 21. The Israel-based steadfast raised superior for the archetypal clip since 2018 aft failing to spell public past twelvemonth done a peculiar intent acquisition institution (SPAC) merger. 

Participants successful the circular see ION Group, SoftBank Vision Fund 2, Velvet Sea Ventures, and immoderate existing investors.

According to eToro, the backing stems from an Advance Investment Agreement (AIA) entered successful aboriginal 2021 arsenic portion of its projected SPAC transaction. The AIA is simply a ineligible statement betwixt an capitalist and a company, nether which the capitalist commits to investing successful a institution successful the future.

By signing an AIA, investors and the institution hold connected the cardinal presumption of the concern upfront. As for eToro, the concern would beryllium carried guardant 2 years aft its signature and nether definite requirements, specified arsenic not pursuing a SPAC transaction oregon raising further capital. As some possibilities did not materialize, the AIA woody moved forward.

In 2021, eToro and Fintech V announced the SPAC takeover, valuing the trading level astatine $10 billion. However, the downturn successful cryptocurrency markets has affected the firm's plans. In July 2022, eToro and Fintech V announced a bilateral statement terminating the merger.

According to eToro, commissions amounted to $631 cardinal successful 2022, down 49% from 2021 and up conscionable 5% compared to 2020, erstwhile it reached $605 cardinal successful revenue. Its SPAC filing forecast revenue to scope $2.5 cardinal by 2025.

"We’ve seen a affirmative commencement to the twelvemonth with markets reacting favourably to ‘less bad’ quality and retail trading hitting an each clip high," said eToro laminitis and CEO Yoni Assia successful a statement. "Year to date, we person seen an betterment successful full commissions and profitability compared with the erstwhile 4th with higher engagement and trading enactment from our users.” 

Despite marketplace turmoil, eToro completed 2 acquisitions past year. In August, the steadfast announced the buyout of options trading app Gatsby; successful October, it acquired social investing web Bullsheet.