Trading platform eToro has secured $250 million in funding at a valuation of $3.5 billion, the company announced on March 21. ) merger.
Participants in the round include ION Group, SoftBank Vision Fund 2, Velvet Sea Ventures and several existing investors.
According to eToro, the funding comes from an Advance Investment Agreement (AIA) entered into in early 2021 as part of the proposed SPAC transaction. AIA is a legal agreement between an investor and a company where the investor makes an investment in the company in the future.
By entering into an AIA, the investor and the company agree to the main terms of the investment. For eToro, the investment will take place two years after signing and subject to certain conditions, such as not pursuing a SPAC transaction or raising additional capital. Since both possibilities did not occur, the AIA deal moved forward.
In 2021, eToro and Fintech V announced the takeover of the SPAC, valuing the trading platform at $10 billion. However, the downturn in the cryptocurrency market has affected the firm’s plans. Last July, eToro and Fintech V announced a bilateral agreement ending the merger.
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According to eToro, commissions will be $631 million in 2022, down 49% from 2021 and only up 5% compared to 2020, when eToro earned $605 million. SPAC revenue is forecast to reach $2.5 billion by 2025.
“We have seen a positive start to the year with markets responding to ‘less bad’ news and record retail trade,” eToro founder and CEO Yoni Assia said in a statement. “Currently, we have seen an increase in total commissions and profits compared to the previous quarter with higher engagement and trading activity from users.
Despite the market turmoil, eToro completed two acquisitions last year. In August, the company announced the purchase of options trading app Gatsby; in October, it acquired the social investment network Bullsheet.