Trading platform eToro has secured $250 million in funding from investors including SoftBank Vision Fund 2, Velvet Sea Ventures, and ION Group at a valuation of $3.5 billion. This marks the first time the Israel-based firm has raised capital since 2018, after failing to go public through a special purpose acquisition company (SPAC) merger last year.
The funding comes as part of an Advance Investment Agreement (AIA) entered into by eToro earlier this year as part of its proposed SPAC transaction. The AIA is a legal agreement between an investor and a company under which the investor commits to investing in a company in the future, with both parties agreeing on the key terms upfront.
The investment will be carried forward two years after its signature, provided eToro meets certain requirements such as not pursuing a SPAC transaction or raising additional capital. As neither of these possibilities materialized, the AIA deal has now moved forward.
eToro and Fintech V had announced a SPAC takeover in 2021, valuing the trading platform at $10 billion. However, the downturn in cryptocurrency markets affected the firm’s plans and the merger was terminated in July 2022.
Despite the challenging market conditions, eToro’s commissions amounted to $631 million in 2022, with the company forecasting revenue to reach $2.5 billion by 2025 in its SPAC filing. The firm’s founder and CEO, Yoni Assia, stated that the company had seen an improvement in total commissions and profitability compared to the previous quarter, with higher engagement and trading activity from its users.