eToro, the Israeli company that offers its clients a trading platform, has acquired Gatsby, a competing firm that offers a commission-free options and stock trading app, for $50 million.
The move comes just a month after eToro was forced to scrap its planned IPO and decided instead to try to raise another $1 billion. The decision to do so came after the deadline initial public offering eToro’s SPAC merger with the Betsy Cohen-backed blank-check company FinTech Acquisition Corp V passed. And it also follows an almost yearlong drama in which the company was forced to lower expectations for the now failed initial public offering a number of times.
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Also at that time, eToro saw its valuation plummet to only half of its one-time high of more than $10 billion. And eToro was also forced to lay off 100 employees.
And it also comes just four months after Gatsby raised $10 million in a Series A round of funding.
Founded in 2018 by Co-CEOs and Co-founders Jeff Myers and Ryan Belanger-Saleh, Gatsby Digital, Inc. says that it is not a broker-dealer nor an investment advisor. Securities and investments are offered through Gatsby Securities, LLC. , Members FINRA and SIPC. “Gatsby” refers to Gatsby Digital, Inc.’s mobile App and website, and with securities offered through Gatsby Securities, LLC. All investments involve risk and past performance of a security does not guarantee future results or returns. While diversification may help spread risk, it does not guarantee a profit or protect you against loss in a down market.
Gatsby’s average trader is about 28 years old, with many still in college. Gatsby allows users to earn rewards points with each eligible trade. Customers can then redeem their rewards for cash at the end of each month.
Founded in 2007 by Yoni and Ronen Assia, and David Ring, eToro developed a platform where users can invest in a variety of equities, commodities, indices, and cryptocurrencies. eToro is a global community of more than 27 million registered users who share their investment strategies. The platform enables users to easily buy, hold and sell assets, monitor their portfolio in real time, and transact whenever they want.
eToro CEO Yoni Assia explained that his company’s acquisition of Gatsby is an acknowledgment of just how much things have changed in the world of investments. “We’ve seen a seismic shift in the balance of power away from traditional finance institutions towards the retail investor,” he said. “The internet has democratized financial information and a sea change has taken place, empowering more everyday investors – particularly Gen Z and Millennials – to trade and invest.”
Assia also explained that because of the current bear market, retail investors are looking for new opportunities to generate returns. He also said that the acquisition will help eToro with its expansion plans for the U.S. market. “Through Gatsby, we can provide U.S. users with access to a safe and simple way to trade options, which we know are particularly attractive in challenging markets,” he said.
