The social investment network eToro is going public in a SPAC deal announced Tuesday morning.
The SPAC Deal: eToro will merge with FinTech Acquisition Corp V FTCV in a deal valuing the investment network at an implied equity value of $10.4 billion.
A $650-million PIPE includes investments from Softbank, Third Point, Fidelity and others.
Current FinTech Acquisition Corp V shareholders will own 2.4% of the company after the merger.
About eToro: Founded in 2007, eToro is a global multi-asset investment platform. The company offers commission-free fractional equity investment, cryptoassets and the ability to replicate other investor’s portfolios.
The company launched Bitcoin BTC/USD trading in 2013 on its platform. In 2020, 44%% of assets were in equities, 32% in commodities, 16% in crypto and 8% in currencies.
The median age of eToro users is 34.
Related Link: eToro Reportedly Exploring IPO Or SPAC As Business Booms
Strong Growth: eToro added over 5 million new registered users in 2020. The company had 17.5 million registered accounts at the end of 2020. In January 2021, eToro had 18.7 million registered users.
The company has over 20 million registered users, according to its investor presentation.
In 2019, eToro added an average of 192,000 new users each month. That figure jumped to an average of 440,000 in 2020.
eToro users made over 75 million trades in the month of January 2021. That marked a significant inscrease from the 8 million and 27 million average monthly trades in 2019 and 2020, respectively.
Growth Ahead For eToro: eToro launched crypto and social trading in the U.S. in 2019. In the second half of 2021, the company plans to launch stock trading in the U.S. market.
In 2020, the European market represented 69% of funded accounts. The Americas region was only 8% of funded accounts, raking third behind Europe and the Asia Pacific region (18%).
eToro sees its total addressable market size increasing thanks to trends like growing retail participation, zero interest rates and democratization of investing.
Over $78 trillion is invested in equites, with 20% of that figure coming from digital platforms.
The company is spending aggressively on marketing to increase its brand awareness and boost registered users.
Financials: eToro’s 2020 revenue was split 87% from trading revenue, 7% interest income and 6% currency conversion.
Revenue of $650 million for eToro in 2020 was up 147% year-over-year. From 2016 to 2020, eToro had compounded annual growth of 78%.
Going forward, eToro is estimating revenue to hit $1.02 billion in 2021, $1.20 billion in 2022 and $1.55 billion in 2023.
The company reported positive EBITDA of $95 million in 2020 and is estimating positive EBITDA each year going forward.
FTCV Price Action: Shares of FinTech Acquisition Corp V were up 15% to $12.27 in premarket trading Tuesday.
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