eToro raises $250M after terminating SPAC deal

Trading platform eToro has secured $250 million in funds at a valuation of $3.5 billion, the company Announced on March 21. The Israel-based firm raised capital for the first time since 2018 after don't make it public last year through a special purpose acquisition company (SPAC) merger.

Participants in the round include ION Group, SoftBank Vision Fund 2, Velvet Sea Ventures and some existing investors.

According to eToro, the funding comes from an Advance Investment Agreement (AIA) entered into in early 2021 as part of its proposed SPAC transaction. The AIA is a legal agreement between an investor and a company under which the investor agrees to invest in a company in the future.

By signing an AIA, investors and the company agree to the key terms of the investment in advance. As for eToro, the investment would roll over two years after signing and under certain requirements, such as not making a SPAC transaction or raising additional capital. As both possibilities did not materialize, the AIA deal went ahead.

In 2021, eToro and Fintech V announced the acquisition of SPAC, valuing the trading platform at $10 billion. However, the recession in the cryptocurrency markets has affected the company's plans. Last July, eToro and Fintech V announced a bilateral agreement ending the merger.

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According to eToro, fees amounted to $631 million in 2022, 49% less than in 2021 and only 5% more than in 2020, when eToro reached $605 million in revenue. Your SPAC file forecast revenues reach $2.5 billion by 2025.

"We have seen a positive start to the year with markets reacting favorably to 'less bad' news and retail trading reaching an all-time high," eToro founder and CEO Yoni Assia said in a statement. seen an improvement in total fees and profitability compared to the prior quarter with increased engagement and trading activity from our users.”

Despite the market turmoil, eToro completed two acquisitions in the past year. In August, the company Announced purchase of the Gatsby options trading app; in October, it acquired Social investment network bullsheet.