eToro, an Israeli company that offers a platform for trading, is still reeling from its failure to move forward with an initial public offering (IPO) through an SPAC merger. And so the company is looking to make up for this by bringing in another $800 million – $1 billion in funding. Calcalist has reported.
The eToro platform and app offer a variety of financial assets in which to trade and invest and is used by people in 140 countries.
Last September, eToro was forced to inform the SEC that it needed to delay the long planned IPO, which had been expected to come that month.
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This news comes just a few months after eToro revealed that it had lowered its IPO expectations by 15%, from a previous expected valuation of as much as $10.4 billion down to just $8.8 billion. Betsy Cohen-backed blank-check company FinTech Acquisition Corp V, the SPAC firm that is merging with eToro for the purpose of the IPO, revealed in an SEC filing that the required closing conditions for the deal by December 31, and hence had extended the deadline to June 30, 2022.
And as Calcalist explains the main problem here is the drop in interest in SPAC mergers as a tool for IPOS. This is when a company is created as a vehicle for another firm to go public. The special purpose acquisition company is just that – its purpose is to acquire a startup and take it public.
Another reason for eToro’s problems might be that the company simply waited too long to go public. Had it succeeded in doing so by the beginning of 2022 then it would have been a different story. But now, for many reasons, the markets are down the world over and so now just isn’t the time for a startup to go public.
And if eToro does succeed in bringing in the new funds it would only be at a company valuation of up to $6 billion, says Calcalist.
Founded in 2007 by CEO Yoni Assia and his brother Ronen Assia, eToro calls itself the world’s leading social trading network, with millions of registered users and an array of innovative trading and investment tools. The company declares its main goal is to remove barriers and make online trading and investing more accessible to the everyday user.