eToro, FinTech Acquisition Corp. V to terminate merger agreement
FinTech Acquisition Corp. V (NASDAQ:FTCV), a publicly-traded special purpose acquisition company, and social investing network eToro Group Ltd announced today that they have mutually agreed to terminate their previously announced agreement and plan of merger, effective immediately.
The proposed merger, initially announced in March 2021, was conditioned on the satisfaction of certain closing conditions, including relating to the Company’s registration statement, within the timeframe outlined by the Merger Agreement and as extended by the Merger Agreement Amendment.
Despite the parties’ best efforts, such conditions were not satisfied within such time frame and the parties were unable to complete the transaction by the June 30, 2022 deadline. FNG had previously reported in late May that the proposed going-public transaction for eToro – which was to have valued eToro at more than $8 billion – was likely to be pulled, at least in its current form, given general market conditions and the fall in valuation of one the key “comps” for eToro in the US, Robinhood.
eToro had poured a large amount of resources into the “IPO” merger with FinTech Acquisition V, which (in part) led to a net loss of $265 million in 2021 for eToro, with its SPAC-IPO related expenses piling up to the tune of about $75 million. As the company grew and prepared to “hit the market”, its Marketing expenses more than doubled from $229 million (in 2020) to $524 million, while Personnel related expenses ballooned from $37 million to $238.6 million.
Betsy Cohen, Chairman of FinTech V commented:
“eToro continues to be the leading global social investment platform, with a proven track record of growth and strong momentum. Although we are disappointed that the transaction has been rendered impracticable due to circumstances outside of either party’s control, we wish Yoni and his talented team continued success.”
Yoni Assia, Co-founder and CEO of eToro commented:
“We would like to thank Betsy and the entire FinTech V team for their hard work, diligence and support throughout this process. While this may not be the outcome that we hoped for when we started this process, eToro’s underlying business remains healthy, our balance sheet is strong and will continue to balance future growth with profitability. We ended Q2 2022 with approximately 2.7 million funded accounts, an increase of over 12% versus the end of 2021, demonstrating continued customer acquisition and retention rates that have been improving over time. We remain confident in our long-term growth strategy and excited for the future of eToro.”
Neither party will be required to pay the other a termination fee as a result of the mutual decision to terminate the Merger Agreement.
In November 2021, FinTech Acquisition Corp. V made a filing with US regulators indicating that it has identified an error in certain of its previously issued financial statements.