Social trading and brokerage company eToro is considering an IPO or SPAC merger to take the company public, according to a report from the Israeli newspaper Calcalist.
What Happened: eToro has engaged in talks with Goldman Sachs about a potential IPO or SPAC merger to take the company public, according to Calcalist.
eToro could be valued at $5 billion in an IPO that could come in the second quarter of 2021, the report said.
“eToro does not comment on market rumours,” a company spokesperson said in a statement to Benzinga.
Why It’s Important: eToro has revenue of around $500 million, according to the report. The company is also said to be profitable, which could help its valuation in a deal.
Customers for the company have reached 17 million, with 5 million additional customers added in 2020.
Trade volume for eToro has tripled since the beginning of 2020. The company differentiates itself with its Copytrader portfolio, which has tools that are offered for no additional charge.
Another positive sign for a potential deal to go public could be the company’s increased headcount. The company has over 1,100 employees now and is reportedly planning to hire hundreds more in 2021.
eToro has raised over $200 million in funding.
Rival Robinhood, which is also considering a 2021 IPO, has also seen an increase in users in 2020.
The company has 15 million users and was completing 4.3 million daily transactions on average during the summer months.
Robinhood reportedly has close to $1 billion in revenue and could be valued at $20 billion.
Potential SPACs: eToro now joins a long list of Israeli technology and fintech companies that are considering 2021 IPOs or SPAC deals.
The GS Acquisition Holdings Corp II GSAH SPAC from Goldman Sachs has raised $700 million and did not specify a target area.
Burgundy Technology Acquisition Corp BTAQ is a SPAC that has said it could target an Israeli company.
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