Israeli online trading platform eToro’s veteran employees and angel investors are selling shares worth $120 million in a secondary deal. In March, eToro raised $250 million at a company valuation of $3.5 billion.
A source close to the company told “Globes” that the shares are being bought by two of the company’s biggest shareholders who took part in the $250 million financing round in March. The source said, “The two shareholders who took part in that financing round are very major shareholders but at their request we are not revealing their names but they are very significant for the company.”
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The source added, “Most of the institutional shareholders of the company are not interested in selling at the value in the current deal. I can say that there was a discount in the company’s last round but the valuation does not represent where most of the company’s shareholders are and it’s not possible to buy at the current price.”
eToro CEO and cofounder Yoni Assia sent a memo to employees, which was seen by “CNBC.” He wrote, “As a business which continues to demonstrate sustainable, profitable growth we are considered an attractive investment opportunity by many investors.”
“This secondary transaction will give existing shareholders in eToro and veteran employees who have vested options the opportunity to sell a proportion of their shares to these purchasers.”
“This is not a primary i.e. eToro is not raising money – rather it is a moment for some long standing shareholders and employees to take some liquidity. As always, please maintain confidentiality and do not share any details of this potential transaction with anyone. Employees with eligible options will receive an email with further details.”
eToro was one of the big beneficiaries of the Covid pandemic with online trading platforms gaining huge valuations. In 2021, eToro signed a SPAC merger deal with Betsy Cohen’s FinTech Acquisition Corp V, at a company valuation of $10.5 billion, although several months late the valuation was cut to $8.8 billion. By March eToro’s valuation had fallen dramatically to $3.5 billion.
In April eToro teamed with Twitter to launch $Cashtags, so that Twitter users can see real time prices for a wide range of stocks, cryptocurrencies and other assets.
In March, eToro reported that 2022 revenue had fallen to $631 million from $972 million in 2021, due to a fall in income from cryptocurrency trading. A source told “Globes” that the company earned profits of $50 million in the first half of 2023.
Published by Globes, Israel business news – en.globes.co.il – on July 31, 2023.
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