The investment platform eToro has announced its IPO in the US on Tuesday, which is expected for the third quarter of the year and with which it intends to raise up to 10.4 billion dollars (8.7 billion euros). The announcement comes after soaring its number of users, operations and revenues in 2020, a growth that has culminated in a historic month of January, in which retail investors flooded the market attracted by the bitcoin fever and the controversial revaluation of Gamestop.
According to the statement released by the company, eToro is expected to be listed on the Nasdaq technology index and its IPO will be carried out using the formula of SPAC (Special Purpose Acquisition Company) a modality used by companies that intend to go public with the intention of raising capital for a potential merger or acquisition of another company. In fact, this move will come hand in hand with a merger with FinTech Acquisition V, an instrumental company that is already listed on Nasdaq and that is dedicated to the acquisition of companies. The shares of its counterpart have soared about 20% after the announcement.
Founded in 2007, eToro calls itself an “investor social network”: it serves both to buy equities or crypto assets and to communicate with other investors. During the year of the pandemic, when bitcoin appreciated 300%, the fintech (financial and technology company) shot up its revenue by 147% compared to 2019 (up to 605 million dollars) and its number of users increased by five million, to exceed 20 million in a hundred countries.
eToro highlights that at the beginning of 2021 this growth trend continues to “accelerate” thanks to the “boom in minority investment” –that is, investors “individuals with less knowledge and experience in the securities markets”, according to the CNMV–.
In January, there was an exorbitant growth in new users of digital investment platforms due to the enormous publicity that these practices received after the Gamestop case, a chain of video game stores whose shares soared more than 400% when a group of foreros of the Reddit website rushed to buy shares outrageously to harm bearish investors, generally funds that bet on the fall in the price of companies. At the same time, the value of bitcoin reached historical records, which caused a draw effect for millions of users towards investment platforms.
Only that month eToro added 1.2 million users, compared to the 440,000 that it added on average each month of 2020 and the 192,000 monthly of 2019. Also in January it registered 75 million operations on its platform, compared to the 27 million it reaped on average each month in 2020.
The Israeli company recognizes that one of its great attractions for new users is its cryptocurrency investment section, and its boom in recent months will benefit the company in the near future. “EToro was one of the first regulated platforms to offer crypto assets and is well positioned to benefit from the widespread adoption of these investments,” says the press release issued this Tuesday.
Betsy Cohen, Chairman of the Board of Directors of FinTech V, also highlights the strong position of eToro internationally: “In recent years, eToro has consolidated its position as the leading social platform for online trading outside the US, has designed its plans for the US market and has diversified its income streams ”.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.