EToro e-commerce firm will be made public in a more than $ 10 billion SPAC deal

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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 special-purpose procurement company or public trading SPAC, in a $ 10.4 billion deal. The shares of FinTech Acquisition Corp. V increased 45% in the news.

“Time will tell how this SPAC enthusiasm develops, but as always, Wall Street milks every cow until it’s dry and then finds out how to take advantage of the carcass,” said James Gowen, director of equity investments at Spouting Rock . Asset Management, in an email to CNN Business.

Marketing of the boom in social trade for stocks and bitcoins

Normally, once a SPAC is made public, it takes between 18 and 24 months to find a company to make it public. If the SPAC is unable to do so, it must dissolve and return the proceeds of its own IPO to investors.

For eToro, founded in 2007 in Israel and with 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 automatically view, track and copy successful investors from around the world.”

The company describes itself as a social trading platform and is growing rapidly.

Revenue doubled in 2020, to $ 605 million, and the company said it added more than 5 million registered users last year. eToro also said its platform’s monthly records grew to 1.2 million in January, up from an average of 440,000 last year.

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The company also said that by 2020 eToro executed more than 75 million transactions, almost three times its monthly average of 27 million. And it bets heavily on trading bitcoins and other cryptocurrencies, as well as stocks.

“In recent years, eToro has consolidated its position as a leading online social trading platform outside the United States, exposed its plans for the U.S. market, and diversified its revenue streams,” he said. Betsy Cohen, president of FinTech Acquisition V, in a statement. “It is now at a turning point in growth and we believe eToro is exceptionally positioned to seize this opportunity.”

Cohen has a track record in creating SPAC to target private companies in the financial services industry. Its FinTech IV SPAC is in the process of merging with investment bank Perella Weinberg Partners.
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Former SPACs run by Cohen have taken on financial technology firm Paya Holdings and the bank transfer service International Money Express (WALK) public. As part of the eToro deal, large investors, including Softbank, Third Point, Fidelity and Wellington Management, are investing $ 650 million combined through a so-called private placement in public capital or PIPE.

Making eToro public now is an interesting time, as its rival, Robinhood, is still on its way to its own IPO this year.

According to data from research firm CB Insights, Robinhood was last valued at $ 11.7 billion. 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 congressional testimony from its CEO in February.

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