eToro files for an IPO in the US at $5 billion valuation
UK news source Financial Times is reporting that social trading focused online broker eToro has filed for an initial public offering (IPO) with US securities regulators.
eToro IPO filing
The confidential filing will allow eToro to clear any comments or issues the regulators may have regarding its prospectus and its financial statements, before eToro has to release that information to the greater public.
Depending on how long its prospectus takes to clear the regulators, and the overall state of the markets, eToro could be ready to go public in Q2-2025.
Investment banks and listing
We had reported in early December that eToro was moving forward with IPO plans, and that the company had hired investment bank Goldman Sachs (NYSE:GS) to lead the IPO. Apparently other co-managers of the planned offering are also now engaged, including Jefferies and UBS. Interestingly, Jefferies owns one of eToro’s rivals, FXCM.
No mention was made of which exchange eToro might list its shares on, but the most two likely candidates are the NYSE, where many financial services company shares are traded, or the more tech and fintech-heavy NASDAQ.
We’d note that earlier today eToro put out a social media post picturing CEO Yoni Assia, and US office head Andrew McCormick, in front of the NASDAQ market podium saying “Hey Nasdaq, nice to see you today💫”, which kind of gives away where the company plans to list.
eToro valuation
Regarding valuation, the Financial Times report quoted a potential $5 billion valuation. That figure is about half the valuation that eToro tried to achieve in its last attempt to go public via a SPAC merger, however that transaction was abandoned in mid 2022.
The $5 billion figure is above the $3.5 billion valuation used in a private funding round for eToro in March 2023. However, we had reported several months later, based on news sources in Israel, that eToro shares were changing hands in the private market based on a valuation of just $1.7 billion for eToro, less than half that amount.
eToro comps
The timing of eToro’s move comes as US neobroker rival Robinhood Markets Inc (NASDAQ:HOOD) has seen its shares increase by more than 4x over the past year, hitting new 12-month highs virtually every week. eToro and its bankers will likely seek to get potential investors to look at Robinhood as its main “comp”, as opposed to its UK and European rivals such as Plus500 (LON:PLUS), IG Group (LON:IGG), CMC Markets (LON:CMCX), XTB (WSE:XTB), and Swissquote (SQN:SWX), which all trade at much lower multiples of Revenue and/or Profit than does Robinhood.
We will continue to follow this story as it develops.