On March 21, eToro, the London-based multi-asset investment firm, raised an astonishing $250M, reaching a valuation of $3.5B. Among the highlights of the 2022 financial figures, eToro reported $631M in total fees, with stocks accounting for 48%, commodities for 27%, cryptocurrencies for 19%, and currencies for 6%. Founder, Yoni Assia, is optimistic about Q1, citing a positive start to the year with retail trading at an all-time high. With an impressive 2.8 million funded accounts as of December 31, 2022, eToro’s commissions and profitability have improved, thanks to higher user engagement and trading activity.
Transaction Overview
According to Assia, the recent capital infusion is not from an equity round but via an Advanced Investment Agreement (AIA), which eToro secured in February 2021 as part of its planned SPAC deal. The funding was secured from ION Group, SoftBank Vision Fund 2, Velvet Sea Ventures, and a few existing investors. Next Round Capital Partners’ CEO, Ken Smythe, explained that an AIA is an agreement where an investor pays in advance for shares that will be allocated at a later date, often at a discounted rate.
About eToro
eToro, established in 2007 by David Ring, Ronen Assia, and Yoni Assia, aims to democratize global markets by enabling everyone to invest and trade in an easy and transparent manner. The eToro Group includes the eToro platform, a multi-asset trading and investment venue, a crypto wallet, and an on-chain crypto exchange. The company provides users with the freedom to choose which assets to invest in, ranging from commission-free fractional equities to crypto-assets, as well as how to invest. Users can trade directly, invest in a smart portfolio, or replicate the strategies of successful traders on the platform at no extra cost.
OpenBook and WebTrader, the company’s products, enable traders to learn from each other, share live trading information, and leverage their collective power. eToro boasts a global community of over 30 million registered users and manages $5.8 billion in assets.
The fintech is regulated by the Australian Securities and Investments Commission in Australia, the Financial Conduct Authority in the UK, and the Cyprus Securities and Exchange Commission in Europe.
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Future Growth
During 2022, eToro made significant efforts to diversify its offerings and expand its global presence. The fintech firm acquired Gatsby, an options trading platform, and Bullsheet, a portfolio management tool for their users. eToro also secured regulatory registrations in France, Italy, and New York, while receiving in-principle approval to operate as a broker in Abu Dhabi. Furthermore, it partnered with ESG Book and Broadridge to introduce ESG scores for stocks and enable proxy voting for over 2,700 stocks, respectively.
According to Yoni Assia, the firm’s 2023-2025 strategy focuses on scaling its brokerage business and increasing profitability through revenue growth and cost management. Despite a volatile market environment in 2022, Assia believes that retail investors remain committed to their long-term goals, as evidenced by eToro’s quarterly Retail Investor Beat survey. The company aims to continue its mission of providing a simple and transparent way for everyone to invest while pursuing profitable growth.
