eToro, a prominent trading platform known for its focus on stocks and cryptocurrency, has officially filed for an initial public offering (IPO) in the U.S., according to a confidential filing with the U.S. Securities and Exchange Commission (SEC). The platform, which caters primarily to retail investors, aims to list its shares on the New York Stock Exchange, marking a significant step in its growth.
IPO Details and Potential Valuation
The IPO, which could take place as early as the second quarter of 2024, could value eToro at over $5 billion, reports the Financial Times. The company has enlisted major financial firms, including Goldman Sachs, Jefferies, and UBS, to advise on the offering.
If successful, eToro would join the ranks of publicly traded companies offering cryptocurrency trading in the U.S., such as Coinbase (COIN) and Robinhood (HOOD). However, eToro’s market capitalization would be much smaller compared to its peers—Coinbase currently has a market cap of $69 billion, while Robinhood stands at $40 billion.
A Lower Valuation Than Previous Attempts
While the IPO is a major milestone, eToro’s expected valuation is much lower than what the company initially sought. In 2021, eToro attempted to go public through a $10.4 billion merger with a special purpose acquisition company (SPAC). However, that plan was scrapped in late 2022 due to unfavorable market conditions.
In 2023, eToro faced a significant drop in valuation, securing $250 million in funding at a $3.5 billion valuation, according to Financial Times. Despite this setback, the company’s valuation has since rebounded, spurred by a resurgence in equity and cryptocurrency markets.
Settlement With the SEC and Market Expansion
As part of its recovery, eToro agreed to pay $1.5 million in 2023 to settle SEC charges for operating as an unregistered broker and clearing agency. The company was also accused of facilitating the trading of certain cryptocurrencies as securities. In exchange, eToro has limited its cryptocurrency offerings in the U.S., allowing users to trade only Bitcoin (BTC), Bitcoin Cash (BCH), and Ether (ETH).
Despite this regulatory hurdle, eToro’s cryptocurrency trading volume surged over 500% in the year ending November 2023, according to Finance Magnates. The platform manages over $11.3 billion in assets for its 3 million users, which includes not just cryptocurrencies but also stocks and exchange-traded funds (ETFs).
Conclusion
eToro’s move to go public signals growing interest in the crypto and retail investing sectors. While the company’s valuation may be smaller than initially anticipated, its continued success in the cryptocurrency space could make it a key player in the public market for years to come.
