Israel based, social trading focused online broker eToro is apparently arranging for its employees and other existing shareholders to sell some of their shares in the company.

In a memo sent today to the company’s employee base (see full text below), eToro CEO Yoni Assia indicated that several of the company’s existing investors have shown interest in buying more shares in eToro. The company itself won’t be raising money or selling any shares, but rather this will just be an opportunity for some of eToro’s early investors, and shareholders (some of whom are partly compensated with equity and options) to achieve some liquidity and convert their shares into cash.

Many of the company’s employees and investors were expecting to “get liquid” when the eToro first announced plans to go public in a SPAC merger at a whopping $10 billion valuation back in March of 2021. However after more than a year of negotiations with outside investors who would need to inject equity to back such a large transaction faltered, and an attempt to lower the valuation to the $8-9 billion range, eToro eventually cancelled the IPO deal in July of last year.

According to business news site CNBC.com citing “sources familiar with the matter,” the planned share sale would allow for about $120 million of secondary sales, based on a company valuation of about $3.5 billion – at about the same valuation that eToro raised $250 million in fresh capital from existing investors earlier this year.

The memo also included some updates on how eToro has been doing lately. Assia indicated that eToro had positive EBITDA of over $50 million in the first six months of 2023. The company has just under 3 million funded client accounts (which stood at 2.8 million as at year-end 2022), with assets under administration (AuA) of $7.8 billion.

The memo sent out today by eToro CEO Yoni Assia to employees reads as follows:

Dear eTorians,

As August approaches I wanted to take a moment to acknowledge the many achievements of H1 and share an outlook for H2.

As outlined in July’s AHM, we had strong business performance in the first half of the year resulting in EBITDA (profits) of over $50 million. Funded accounts now stand at almost 3 million and our assets under administration (AuA) are $7.8 billion. This positive start to the year was driven by the rally in equity markets  (in June we saw the highest volume of equities trading since 2021) plus a recovery in crypto markets. We have also maintained our focus on costs to ensure sustainable, profitable growth.

2023 to date has been very busy in terms of product development, launches and partnerships with highlights including: the significant upgrade to our charts via a partnership with TradingView (more coming soon), an ISA with MoneyFarm, major milestones in terms of UX optimization including the new AI assistant, the launch of the amazing new eToro Academy, the launch of extended hours trading, expanding our football sponsorships to include women, adding more assets and so much more.

I also want to update that we were recently approached by several existing investors who have shown an interest in buying more shares in eToro.  As a business which continues to demonstrate sustainable, profitable growth we are considered an attractive investment opportunity by many investors. [Please note this is not financial advice!]  This secondary transaction will give existing shareholders in eToro and veteran employees who have vested options the opportunity to sell a proportion of their shares to these purchasers. This is not a primary i.e. eToro is not raising money –  rather it is a moment for some long standing shareholders and employees to take some liquidity. As always, please maintain confidentiality and do not share any details of this potential transaction with anyone. Employees with eligible options will receive an email with further details.

For those of you taking a well-earned break in August, enjoy your vacation and I hope you come back refreshed and energized for an exciting second half of the year.

Best,

Yoni