Crypto-Friendly Neo-Broker eToro Files for IPO
The listing marks a potentially triumphant comeback story and an insult of sorts to the embattled London stock exchange.
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It’s only fitting that a firm called eToro would run into a bull market.
The retail trading platform has filed to go public in New York and is seeking a valuation over $5 billion, the Financial Times reported Thursday. It marks a potentially triumphant comeback story and an insult of sorts to the embattled stock exchange that dominates the company’s largest market.
Timing is Everything
The company planned to go public through a $10.4 billion merger with a special purpose acquisition company (SPAC) in 2021 but pulled the plug in 2022 as market conditions worsened — possibly dodging a bullet, considering the long line of failures to come out of the SPAC bubble.
By 2023, eToro’s valuation had plunged to $3.5 billion in a $250 million funding round that included SoftBank, the Japanese mega investor that has placed its fair share of bad bets in recent years. But the equity market bonanza of the last two years put retail trading platforms on a solid footing — and eToro, founded in 2007, has long been friendly to cryptocurrencies, so the 94% surge in Bitcoin in 2024 was a turbocharge of sorts. If its IPO is successful, eToro will become a little sibling to its publicly traded rivals.
- Crypto exchange Coinbase has a $69 billion market cap while Robinhood, which supports the trading of stocks, exchange-traded funds, and cryptocurrencies, is valued at $40 billion by markets. Public listings have been kind to both as markets have surged: Robinhood’s share price has more than quadrupled in the last 12 months, while Coinbase is up over 110% in the same time period.
- Goldman Sachs, Jefferies, and UBS are working on eToro’s IPO plans, the FT said, and the bankers will want to pitch investors on Robinhood and its astronomical growth as the ideal comparison. Don’t pay attention to UK and European rivals like CMC Markets and Swissquote, which trade at lower relative valuations to revenue.
London Calling (But No One’s Answering): Founded in Israel, eToro’s largest market is the UK. Its decision to list in New York is the latest blow to London, where high-profile listings hit a post-financial crisis nadir last year: Fewer than 20 companies listed, the least since 2009. Meanwhile, eToro could be trading in New York as soon as the second quarter.