eToro, a popular retail trading platform for stocks and cryptocurrencies, is preparing for an initial public offering (IPO) on the New York Stock Exchange (NYSE), according to a recent Financial Times report citing a confidential filing with the U.S. Securities and Exchange Commission. The IPO, potentially launching as early as the second quarter, could value eToro at over $5 billion, with Goldman Sachs, Jefferies, and UBS advising on the process.
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From SPAC to Traditional IPO: eToro’s Path to Public Markets
A successful NYSE listing would position eToro alongside Coinbase and Robinhood as a publicly traded crypto trading platform in the U.S. However, eToro’s estimated valuation significantly trails both Coinbase’s $69 billion and Robinhood’s $40 billion market caps. This valuation also represents a considerable reduction from eToro’s previous attempt to go public via a special purpose acquisition company (SPAC) in 2021, targeting a $10.4 billion valuation. Unfavorable market conditions led to the abandonment of the SPAC deal in late 2022.
Following the failed SPAC merger, eToro secured $250 million in funding in 2023 at a reduced valuation of $3.5 billion, with participation from investors like SoftBank. The recent resurgence in equity and cryptocurrency markets, coupled with a $1.5 million settlement with the SEC regarding unregistered broker and clearing agency operations, has contributed to eToro’s rebounding valuation. The settlement required eToro to cease trading most cryptocurrencies in the U.S., limiting offerings to Bitcoin (BTC), Bitcoin Cash (BCH), and Ether (ETH).
Riding the Crypto Wave: eToro’s Trading Volume and User Base
While specific figures remain undisclosed, reports suggest eToro experienced a dramatic surge in cryptocurrency trading volume, exceeding 500% growth in the year leading up to November 2023. Founded in Israel in 2007, eToro reportedly manages $11.3 billion in assets for over 3 million customers, encompassing not only cryptocurrencies but also stocks and exchange-traded funds (ETFs).
eToro’s Future on the NYSE
eToro’s planned IPO marks a significant step for the company, potentially providing access to a broader investor base and further capitalizing on the growing interest in digital assets. The company’s ability to navigate regulatory challenges and compete in a dynamic market landscape will be crucial to its success as a publicly traded entity. eToro has not yet issued a public statement regarding the IPO.
