Online trading company eToro will go public in more than $ 10 billion SPAC

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EToro, a broker with more than 20 million users, said Tuesday that it is merging with FinTech Acquisition Corp. V, a publicly traded special purpose company or SPAC, in a $ 10.4 billion business. FinTech Acquisition Corp. shares V increased by 45% in the news.

“Time will tell how this SPAC enthusiasm unfolds, but as always, Wall Street milks every cow until it’s dry and then realizes how to take advantage of the carcass,” said James Gowen, investment director of small-cap stocks at Spouting Rock Asset Management, in an email to CNN Business.

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Usually, once SPAC goes public, it takes about 18 to 24 months to find a company to merge with to be public. If SPAC is unable to do so, it must dissolve and return the proceeds from its own IPO to investors.

For eToro, which was founded in 2007 in Israel and has offices in Cyprus, the United Kingdom, Australia and the United States, the merger with FinTech Acquisition Corp. it’s a way to grow your business and create more brand recognition – especially since Robinhood is still dealing with the bad press it received for temporarily banning GameStop trading on the platform.

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“We founded eToro with the vision of opening up the global market so that everyone can trade and invest in a simple and transparent way,” said Yoni Assia, CEO of eToro, in a statement. “Our users come to eToro to invest, but also to communicate with each other; to see, track and automatically copy successful investors around the world.”

The company describes itself as more of a social trading platform – and growing rapidly.

Revenue doubled in 2020 to $ 605 million, and the company said it added more than 5 million new registered users last year. eToro also said that monthly registrations for its platform increased to 1.2 million in January, compared to an average of 440,000 last year.

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The company also said that in 2020 eToro executed over 75 million transactions, almost tripling its monthly average of 27 million. And it bets a lot on trading with bitcoin and other cryptocurrencies, as well as on stocks.

“In recent years, eToro has strengthened its position as a leading online social trading platform outside the US, presented its plans for the US market and diversified its revenue streams,” said Betsy Cohen, President of FinTech Acquisition V. in a statement. “We are now at a turning point in growth and we believe that eToro is exceptionally positioned to seize this opportunity.”

Cohen has a history of creating SPACs to target private companies in the financial services sector. FinTech IV SPAC is in the process of merging with investment bank Perella Weinberg Partners.
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Earlier SPACs led by Cohen took over financial technology firm Paya Holdings and bank transfer service International Money Express (WALK) public. As part of the eToro transaction, large investors, including Softbank, Third Point, Fidelity and Wellington Management, are investing a total of $ 650 million through a so-called private equity investment or PIPE.

The release of eToro is now an interesting moment, given that its rival, Robinhood, is still on its way to its own IPO later this year.

Robinhood was last valued at $ 11.7 billion, according to research firm CB Insights. The company also said last month that it had raised $ 3.4 billion to fuel what it called record customer growth. It has about 13 million customers, according to the congressional testimony of its CEO in February.

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