Wealthtech

eToro to go public via SPAC Merger

eToro SPAC deal may help set valuations and IPO ranges for competitive trading platforms, like Robinhood

Online trading platform eToro has reached an agreement with Betsy Cohen’s SPAC, FinTech Acquisition Corp. V, to take the company public in a deal valuing the business at $10.4 billion, according to Bloomberg.

While Bloomberg positions eToro as a Robinhood competitor, eToro is not yet offering stock trading services in the U.S. The company became a FINRA member in 2020, and is expected to launch U.S. stock trading in the second half of 2021. Currently, users in the United States can trade cryptocurrencies on the platform and the site says “Stocks? They’re coming.”

Like its rival startup trading platforms, eToro offers zero-commission trading. To monetize, eToro captures a spread between the price its pays for securities and the price it passes along to customers. The company does not benefit from payment-for-order-flow like Robinhood. Competitor, Public.com abandoned the payment-for-order-flow model in February of 2021, and has launched a tipping business model which enables users to give the company an optional tip when users place trade orders.

eToro was founded in Israel in 2007, the company has over 20 million registered users in dozens of countries and the company’s website reports it expanded into the U.S. in 2018.

This deal is notable as it will help set valuations and IPO ranges for competitive trading platforms, like Robinhood.

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