By
Steve Muchoki
April 25th, 2024
The CEO noted that beyond the eToro IPO, the firm has prioritized product enhancements in 2023, focusing on advanced trading experiences and technical analysis features for its user base.
eToro, a popular social trading and multi-asset investment company is reviving its plans for an Initial Public Offering (IPO) listing after its previous plans to go public via a SPAC (Special Purpose Acquisition Company) deal came to a halt.
eToro IPO Plans Renewed
CEO Yoni Assia revealed in an exclusive interview with CNBC that the company is garnering interest from both bankers and investors regarding a potential IPO. Assia stated:
“We definitely are eyeing the public markets. I definitely see us eventually becoming a public company.”
He, however, emphasized that the timing of the eToro IPO listing is under evaluation, considering the right opportunity, timing, and market conditions.
Assia added that the firm has already cultivated strong relationships with exchanges, particularly highlighting its rapport with the Nasdaq stock exchange. He suggested that eToro has laid the groundwork necessary for a public offering, indicating that it’s more a matter of when, not if, the company will list.
Reflecting on their earlier attempt, eToro initially planned to go public in 2022 through a merger with a SPAC, FinTech Acquisition Corp V, valuing the company at around $10.5 billion. However, market downturns in both equity and crypto prices led to the abandonment of these plans. Assia, drawing from the experience, remarked that they’ve learned valuable lessons from observing market changes, particularly in the U.S.
The CEO stressed the importance of educating customers about market fluctuations, noting that 2022 was a year focused on such education. Despite setbacks, eToro managed to secure $250 million in funding in March 2023, with a valuation of $3.5 billion, backed by investors like SoftBank Vision Fund 2, ION Investment Group, and Velvet Sea Ventures.
In addition, a secondary share sale allowed early employees and investors to sell $120 million worth of stock, further affirming investor confidence in the company, albeit at a valuation slightly below $3.5 billion.
eToro’s Expansion Plans
The broader ecosystem for financial technology companies has been challenging due to fluctuations in interest rates, impacting risk assets. However, recent successes of companies like Affirm Holdings Inc (NASDAQ: AFRM) and Coinbase Global Inc (NASDAQ: COIN) in public markets signal a positive shift. Assia remains optimistic about the market’s course, anticipating improvements in 2024, particularly if interest rates are lowered by the US Federal Reserve.
Assia noted that beyond the eToro IPO, the firm has prioritized product enhancements in 2023, focusing on advanced trading experiences and technical analysis features for its user base. Despite challenges, the company reported $630 million in revenue for 2023, matching its 2022 figures, with a notable achievement of reaching profitability, boasting $100 million in EBITDA.
eToro’s revenue model primarily relies on trading-related fees and a membership product, the eToro Club, which offers premium services to users. With 35.5 million registered users and over 3 million funded accounts, the company has surpassed $10 billion in total customer assets under administration.
Looking forward, eToro aims to leverage Artificial Intelligence (AI) technologies, particularly in content automation and enhancing the trading experience. Assia highlighted the integration of AI in marketing and content creation, emphasizing its importance in driving engagement and providing value to users.