eToro planned to go public in 2022. However, a market downturn in equity and crypto prices forced the company to abandon its IPO plans.
Popular trading platform eToro has offered $120 million worth of its stocks to existing investors in a secondary share sale. The deal, announced by the company on Friday, slightly lowered its valuation from $3.5 billion in March when it raised $250 million from investors.
The secondary share sale will allow some of eToro’s early backers to cash out some of their stakes in the company. Consequently, it appears only some employees and investors will get a chance to sell shares. eToro’s co-founder and CEO Yoni Assia noted that qualified investors will be contacted.
Assia also stated that the company did not issue any new securities and would not profit from the transaction. He emphasized that the firm continues to attract potential investors interested in its prospects.
“As a business which continues to demonstrate sustainable, profitable growth we are considered an attractive investment opportunity by many investors,” he concluded.
eToro Secondary Share Sale Lowers Valuation
Since its establishment in 2007 in Israel, eToro has grown rapidly. Like many wealth management firms, it tapped into the surge of interest in online trading among retail investors during and after the COVID-19 pandemic.
eToro planned to go public in 2022 after merging with FinTech Acquisition Corp V. This pushed the company’s valuation to about $10.5 billion. However, a market downturn in equity and crypto prices forced the company to abandon its IPO plans. Soon the company’s valuation was cut to $8.8 billion. By March, eToro’s valuation was just $3.5 billion. The secondary share sale means the valuation is now lower than $3.5 billion.
Despite these, eToro has over 28 million registered users from more than 100 countries. Its funded accounts are about 3 million and assets worth $7.8 billion are under administration (AuA). Also, the company generated profits exceeding $50 million in the first half of the year.
A Commitment to Innovation
Meanwhile, eToro has been innovating to stay ahead of its competitors like Robinhood. Earlier, eToro partnered with Twitter, (now X corp) to allow Twitter users to access stocks and crypto trading using cashtags. It also partnered with MoneyFarm to bring ISA solutions to its clients.
Further, the company upgraded its trading chart through a partnership with TradingView. It also launched a new AI assistant and a trading academy. As a social investing network, eToro claims to empower people to grow their knowledge and wealth as part of a global community of investors.
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