eToro Plans US IPO Targeting $4 Billion Valuation

The path to becoming a publicly traded entity is often complex, and for financial trading platform eToro Group Ltd, it involves a renewed strategy. The company is now gearing up for an Initial Public Offering (IPO) in the United States, a significant move after previous attempts to enter the public markets took different forms.

IPO Ambitions and Financial Targets

eToro is aiming for a valuation of approximately $4 billion with its U.S. IPO. The company intends to raise around $500 million through this offering. The proposed structure involves the company, along with certain existing shareholders and affiliated entities, making available 10 million Class A common shares. These shares are anticipated to be priced between $46 and $50 each and are slated to trade on the Nasdaq exchange under the ticker symbol ETOR.

While a registration statement has been filed with the U.S. Securities and Exchange Commission (SEC), it is important to note that this filing has not yet become effective. Leading the underwriting efforts are prominent financial institutions including Goldman Sachs & Co. LLC, Jefferies, UBS Investment Bank, and Citigroup.

Key Financial Commitments

Signifying investor confidence, BlackRock has expressed interest in acquiring shares valued at $100 million at the IPO price. Additionally, eToro has set aside approximately 500,000 shares for a designated internal program.

Navigating Market Dynamics and Past Endeavors

This current IPO attempt follows a different trajectory than past efforts. In 2021, eToro pursued a public listing via a merger with a special purpose acquisition company (SPAC), a deal that ultimately did not materialize but had valued the company at a significantly higher $10.4 billion at the time. Subsequent to the termination of the SPAC transaction, eToro successfully secured $250 million through an Advanced Investment Agreement (AIA), effectively a pre-IPO sale of shares to select investors.

Market conditions play a crucial role in IPO timing. Earlier reports from Reuters indicated a potential postponement of eToro’s IPO plans, attributed to prevailing market conditions, including the tariff policies enacted under President Donald Trump’s administration.

Adjustments in Cryptocurrency Services Amid Regulatory Scrutiny

The company has also navigated the evolving regulatory landscape for digital assets. In June 2023, eToro responded to regulatory pressures in the United States by suspending support for a selection of cryptocurrency tokens. This was followed by a broader move to delist a majority of crypto assets from its trading platform for U.S. customers, reflecting a cautious approach in a tightening regulatory environment.