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eToro will not proceed with its SPAC deal after it became ‘impracticable.’ The social company now wants fresh capital via private funding.
eToro has reportedly canceled its $10 billion SPAC (special purpose acquisition company) merger after mutually agreeing with acquisition firm FinTech Acquisition Corp V to do so. According to both companies, the closing conditions agreed upon at the initial proposal of the merger have not been met.
Key eToro & FinTech Acquisition Corp V Personnel Comment on Failed SPAC Deal
Speaking on the failed initiative, Betsy Cohen, Chairman of FinTech Acquisition Corp V stated:
“Although we are disappointed that the transaction has been rendered impracticable due to circumstances outside of either party’s control, we wish [Yoni, the eToro co-founder, and CEO] and his talented team continued success.”
eToro co-founder and CEO Yoni Assia gave a gracious parting speech.
“We would like to thank Betsy and the entire FinTech V team for their hard work, diligence and support throughout this process,” said he.
Furthermore, Assia explained that despite the perceived disappointment, eToro was already looking ahead at prospects and possibilities. As the CEO of the Israeli multinational social trading and multi-asset investment company explained:
“While this may not be the outcome that we hoped for when we started this process, eToro’s underlying business remains healthy, our balance sheet is strong and will continue to balance future growth with profitability.”
According to Assia, eToro ended the second quarter of 2022 with approximately 2.7 million funded accounts. This increased by more than 12% compared to the end of 2021. It is also indicative of two factors: sustained improvement of continued customer acquisition and retention rates.
Because both eToro and FinTech Acquisition Corp V agreed to terminate the SPAC deal, neither platform will pay a termination fee. eToro is now reportedly looking for new funding to bankroll its operations. In addition, reports say that the Middle Eastern crypto exchange platform is considering a private funding round. These reports suggest that the capital infusion would be between $800 million and $1 billion. This would value eToro at a lofty $5 billion.
Recap of eToro SPAC Deal Development
In March last year, eToro and the special purpose acquisition company agreed to form a combined entity worth $10.4 billion. The entity was to operate as eToro Group Ltd, with an implied enterprise value of $9.6 billion for eToro.
The combined entity was seeking a listing on the tech-heavy Nasdaq Composite. Reports put the expected net cash on the planned company’s balance sheet as $800 million.
Throughout last year, SPAC deals proved very popular among crypto-focused companies looking to access public stock markets. However, the sustained downturn in the global crypto marketplace has seen this trend cool off considerably.
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Founded in 2007, eToro has a global community exceeding 27 million registered users who share their investment strategies. Back in April of this year, the firm debuted in the NFT space with eToro.art.