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Brokerage Platform eToro Reportedly Files for Initial Public Offering
New reporting indicates that the digital brokerage platform eToro has filed to go public.
About the reported filing:
According to the Financial Times, eToro has made a confidential filing with the Securities and Exchange Commission seeking an initial public offering in the United States. This IPO would apparently value the company around $5 billion. FT’s sources suggest the company could be listed as early as the second quarter of this year. However, representatives for eToro declined to comment on the report.
eToro is a retail brokerage that offers stock, ETF, and options trading but also has an emphasis on cryptocurrencies. Founded in 2007, the company managed a reported $11.3 billion in customer assets and had 3 million accounts as of March 2024.
As FT notes, eToro previously planned to go public via a special-purpose acquisition company (SPAC) in 2021. That deal would have valued the company at $10.4 billion. However, that route was abandoned in 2022. Later, eToro raised a $250 million venture round at a pre-money valuation of $3.3 billion.
What they’re saying:
Notably, the Israel-based brokerage’s largest market is currently the United Kingdom. Asked last year about the potential of going public on the U.K. market, eToro’s CEO and founder Yoni Assia responded, “Retail investors in the U.K. and Germany want to trade U.S. stocks. We see that U.K. clients might trade U.K. shares, but very few of our global clients would trade U.K. shares.” Assia continued, “Something in the U.S. market creates a pool of both deep liquidity and deep awareness for those assets that are trading in the U.S..”
My thoughts:
Based on the numbers, it seems as though the past few years have been as volatile for eToro as they have for the crypto market itself. Yet, while Bitcoin has reached all-time highs as of late, eToro’s proposed IPO valuation is still a far cry from its 2021 SPAC plan — although it is at least higher than its most recent funding round.
As for how eToro could fare on the market, an obvious comparison point would be Robinhood. In fact, $HOOD’s recent rebound and upward trajectory as of late (which follows a more than two-year slump) may have played a role in eToro’s decision to pursue an IPO now.
With Bitcoin and stocks continuing to enjoy a bull market, perhaps eToro can also ride that wave to a successful IPO. In turn, the exposure that the offering provides could also boost new sign-ups as new traders jump into the market for the first time or those who may enjoy Robinhood et al. seek potential alternatives. Of course, with eToro themselves keeping tight-lipped on their plans for now, we’ll need to wait and see if an IPO really is in the cards for 2025.
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