Retail trading platform eToro has seen considerable success as the trend towards direct trading increases, with over 20 million registered users. Now, in a merger with the special purpose acquisition company (SPAC) Fintech Acquisition Corp V, which values eToro at US$10.4 billion, it will become a publicly traded firm.
We caught up with eToro’s CEO Yoni Assia to discuss how the process worked and what investors thought about going public via a SPAC deal.
Dan Barnes Welcome to Primary Markets TV – your update on newly issued securities. I’m Dan Barnes. Joining me today is Yoni Assia, CEO of eToro, which has just become public. Yoni, welcome to the show.
Yoni Assia Thank you very much, and thank you for having me on the show.
Dan Barnes You’ve gone public in a very interesting way. Could you tell us a bit about the process and how you gauge investor appetite when going public via a SPAC merger?
Yoni Assia So, first of all, we do think that SPAC is an innovative way for companies to transition between the private markets and public markets. We’re very happy about the business combination together with FinTech Group, which is led by Betsy Cohen, the chairman of FinTech Five. This is their eighth SPAC, so they have much more experience than we do on SPACSs in general. A SPAC process is a bit different than the traditional IPO route. That means we are merging together with an existing public markets company, a blank check company. FinTech Five, in this case of our own SPAC and this process has been announced. We’ve signed the deal, and that was the announcement this week, and we’re very excited about the next stage of growth of eToro as a public company.
Dan Barnes And what’s the feedback been from the markets on the deal?
Yoni Assia We’ve been big fans of public markets since we launched Teoro. eToro is the world’s largest social trading network. We have 20 million registered users from 100 different countries who can trade commission-free stock trading alongside cryptocurrencies, commodities, indices, ETFs and traditional currencies. We’ve always been passionate about opening the global markets for everyone to trade and invest in a simpler and transparent way. We’ve been promoting the participation of retail investors in the markets since we started eToro. So for us, the concept that eToro now will become a public company, that investors can invest in the SPAC now or in the company eventually as it de-SPACs and merges into the public company for us is a very exciting point in time to share our success in our next stage of growth with retail investors. This process now enables people to invest in SPACS in general, pre-announcement or post-announcement participating in that stage of growth.
Dan Barnes How do you see your operational structure potentially changing?
Yoni Assia We feel very comfortable that our very seasoned, long-term tenure, management team can help with a transition from the private markets into the public markets. We’re looking at an enterprise valuation of 10.4 billion dollars. We’re already a very mature, high growth company. Last year we grew our revenues 147% year-over-year to 600+ million dollar revenues. We have 1100 employees globally in Europe, the UK, in Australia, as well as in the US as a broker dealer. So we’re very excited about this path into the public markets. We do believe that from a day-to-day perspective of operating the company, it will just enable us to give better service, invest more in our new products, innovative products for our customers, and really enable our users to enjoy newer innovations from us. Again, what makes eToro, eToro, which is our social trading network where our users can see, follow and automatically copy top traders from all over the world.
Dan Barnes And then finally, typically when people go public, they’re raising money to invest in the services. You mentioned that the services will be evolving. Could you give us a bit of color on how service offerings might change in the future for the traders?
Sure, So we did a 650 million dollar pipe with amazing public market investors, Wellington, Fidelity, Softbank, Third Point. A big part of our growth plans are both to expand our offering overseas, so in Europe and the UK into our eToro money products. We’re right now one of the fastest growing FinTech brokers in Europe, in Asia and the Middle East. And we plan to launch our own debit card and current account to enable our users to spend directly in-store from their investment accounts so they can invest in Facebook stock or in Bitcoin on eToro. They can copy automatically top traders from all over the world or invest in our thematic investment portfolios on eToro, and then they can directly spend that in store, they can manage their current accounts in eToro as well. We’ve launched eToro in the US. We’ve seen triple digit growth rates quarter-over-quarter. We’ve been able to grow to over 600 million dollars in revenues, almost with no US presence, and are now looking to significantly expand our presence in the US. We’re going to launch commission of e-stock trading and our copy-trading pattern technology in the US during 2021 and we are excited about expanding our services and offering in many more countries.
Dan Barnes Well, it’s going to be a very busy year ahead for you, but congratulations on the deal, and thank you so much for coming on the show.
Yoni Assia Thank you for having me.