eToro’s IPO could exceed $5B valuation, pending SEC approval

Israel-based online trading platform eToro today confirmed the submission of confidential filings with the U.S. Securities and Exchange Commission (SEC) amid a challenging period for high-profile public listings. Financial Times first reported the news back in January.

The online trading platform has not yet determined the number of shares to be offered or the price range for the IPO. The listing is expected to proceed after the SEC completes its review, subject to market conditions.

According to FT, the initial public offering (IPO) could happen as early as the second quarter of 2025, with the company’s valuation expected to exceed $5 billion.

This is eToro’s second attempt to go public. In 2021, the company pursued a $10.4 billion merger with a special purpose acquisition company (SPAC), but the deal was abandoned in 2022 due to a market-wide SPAC downturn.

The social investing network has shown resilience since then, raising $250 million in March 2023 at a $3.5 billion valuation. That round included investments from ION Group, SoftBank’s Vision Fund 2, and Velvet Sea Ventures. However, reports from Israel suggested in December that eToro’s shares were traded privately at a valuation closer to $1.7 billion, revealing a massive discrepancy.

Beyond its IPO plans, eToro expanded its offerings and global footprint. In September 2023, the company acquired Australian investment app Spaceship for $55 million. However, it also faced challenges, including a $1.5 million settlement with the SEC over allegations of operating as an unregistered broker and clearing agency in the U.S. since at least 2020. The settlement restricts eToro’s crypto trading operations in the U.S. but does not impact its global business.

Founded by CEO Yoni Assia, eToro employs nearly 1,700 people worldwide, with 1,000 based in Israel. The company’s IPO plans come during a period of heightened interest in crypto-related financial activities.

The decision to pursue an IPO now comes as eToro seeks to take advantage of favorable market conditions, particularly growing retail interest in cryptocurrency. The recent surge in Bitcoin’s price, alongside broader enthusiasm for crypto trading, boosted investor sentiment.

eToro is also inspired by the strong market performance of rivals like Robinhood and European brokers such as Plus500, XTB, and Swissquote.

The company has been expanding its footprint in the US, launching services nationwide in November after debuting in the New York market. Despite facing regulatory challenges, eToro continues to grow its presence by offering US users the ability to trade fractional stocks, ETFs, and options.

Assia highlighted the appeal of the US market, noting that retail investors in the UK and Germany show a strong preference for trading US stocks due to the market’s deep liquidity. However, eToro’s European and UK market focus, where nearly 70% of its revenues are generated, didn’t influence a decision to opt for a US listing, providing a boost to a market currently facing challenges in attracting IPOs.