Israeli investment and trading platform eToro Group Ltd. is preparing to enter the American stock market after a brief delay in plans due to market volatility. The company and its shareholders are seeking to raise up to $500 million in an initial public offering (IPO) that could be launched as early as next week. For investors, this opportunity represents a chance to participate in the growth of one of the fastest-growing fintech companies in recent years.
Key IPO Details
You can already track eToro on our platform under the symbol ETOR, where we are actively monitoring the subscription price. It is expected to range between $46-50 USD per share, with the anticipated subscription date set for May 14, 2025. At the upper end of the price range, the company’s market value would reach approximately $4 billion.
As part of the IPO, eToro and some of its shareholders are offering a total of 10 million shares:
- 5 million shares offered directly by eToro
- The remaining 5 million shares offered by existing shareholders including:
- Spark Capital
- BRM Group Ltd.
- Andalusian Private Capital
- CM Equities SP
- Executive directors including co-founder and CEO Yoni Assia and his brother Ronen
Funds and accounts managed by BlackRock Inc. have already expressed interest in purchasing eToro shares worth up to $100 million at the IPO price. The company has also reserved up to 500,000 shares for sale through a direct sale program.
Impressive Financial Results Support IPO Potential
The enormous potential of this IPO is undeniable, as demonstrated by current financial results:
- Significant Revenue Growth: The company recorded an increase in revenue to $931 million in 2024, representing year-over-year growth of 48%.
- Strong Profitability: eToro reported a net profit of $192 million in 2024, compared to just $15.3 million in the previous year – more than a twelve-fold increase.
- Rapid User Base Growth: In 2024, the company acquired 498,438 new clients, representing a 59.8% increase compared to the previous year.
This growth was supported by increased activity in cryptocurrency and stock trading, as well as an overall increase in the number of platform users.
Strategic Expansion and Acquisitions
In September 2024, eToro announced the acquisition of Australian fintech company Spaceship for $80 million. This strategic move allowed eToro to expand its services in savings and retirement security for younger investors in Australia. The company also plans further expansion into Asian markets.
eToro also completed a funding round in 2023 that valued it at $3.5 billion. Investors such as ION Group and SoftBank Vision Fund 2 participated in this financing.
Market Context and Competition
Shares of Robinhood Markets Inc., which offers a similar range of trading services and is a direct competitor to eToro, have seen an increase of nearly 37% in the past month. This positive trend suggests favorable conditions for eToro’s market entry.
It’s important to mention that eToro previously attempted to go public through a SPAC merger with a valuation of $10.4 billion, but has now chosen the traditional IPO route.
Potential Risks
In its IPO prospectus, the company lists several potential risks, particularly related to digital assets. State-level cryptocurrency regulation in the US could make it difficult for the platform to operate in some jurisdictions. eToro also expects to “continue to incur significant costs” related to the new European Union framework for crypto assets.
An interesting note is that sanctions currently prevent the distribution of some shares to SBT Venture Fund I, which is affiliated with Russia’s Sberbank PJSC. This fund, which owns more than 6% of Class A shares, has restricted voting rights and cannot transfer or acquire new shares.
Technical IPO Details
The IPO is led by leading investment banks including Goldman Sachs Group Inc., Jefferies Financial Group Inc., UBS Group AG, and Citigroup Inc. eToro shares are expected to trade on the Nasdaq Global Select Market under the symbol ETOR.
For investors, eToro’s IPO represents an interesting opportunity to participate in the growth of one of the leading platforms for stock and cryptocurrency trading, which has demonstrated its ability to grow rapidly and adapt to changing market conditions in recent years.
