THE fintech Israeli eToro recently reached a market value of US $ 2.5 billion. An undisclosed US institutional investor will have purchased $ 50 million in eToro shares, placing the total fintech that amount.
This information, shared by Calcalist, appears to have come from an anonymous source. Officially, and through a statement, eToro does not confirm or deny the allegation. According to Finance Magnates, the company only mentioned that it has grown immensely throughout 2020 and has aroused interest among investors worldwide; however, it does not interfere in the decisions made on the secondary market by its shareholders.
Calcalist also said that eToro expects its value to increase even further after the next round of funding. The last round took place in 2018, with eToro raising US $ 100 million, with China Minsheng Financial being the main investor. Other major investors in the platform include Chemi Peres, the Israeli venture capitalist who founded Pitango VC and son of the late statesman Shimon Peres; the Israeli and business angel Guy Gamzu; and Chinese insurance giant Ping Na.
2020 was the year of greatest growth for eToro
EToro has experienced tremendous growth throughout 2020. The volume of trading has tripled in relation to 2019. The need led to the recruitment of 300 employees, half of them in Israel.
At the same time, it took several steps in terms of market presence. Through the acquisition of Marq Millions Ltd, it was able to supply its own debit card in the British market. In October he confirmed himself as a member of the Financial Industry Regulatory Authority (FINRA), the self-regulatory body in the United States, which means that he is now able to operate “social trading” in the American market.
Among the main world markets, eToro is firmly established in the British and North American markets. But the opinions about eToro will tend to become clearer in other markets as the company's marketing efforts pay off. The eToro brand is closely linked to the image of Alec Baldwin and the online advertising campaign associated with it. At the same time, in September the brand announced new sponsorship contracts with six football clubs in the British Premier League and six more in the German Bundesliga.
eToro has tripled its value in two years
The 2018 financing round had left eToro's market value at $ 800 million. According to this last assessment, even if unofficial, the company's market value will have tripled significantly.
EToro was founded in 2007 by its current CEO, Yoni Assia, with two partners. The platform's objective is to open and democratize financial markets, in order to allow everyone to invest in a simple and transparent way. There are currently around 16 million users of eToro, who can invest not only in stocks but also in commodities and digital assets. It has already raised a total of $ 162 million in five financing rounds. The company currently has about 1000 employees spread across 10 offices in several countries, with 600 working in Israel.
Social trading: the future of investment?
EToro was one of the first social trading platforms, betting on the concept of taking each investor to observe the behavior in the manner of a social network. Applying the resources of the Information Age to the age-old concept of the free market, based on a principle of self-regulation and access to information, is a concept that has a strong probability of becoming the future of investment in the financial markets.
At eToro, users are not limited to creating their own investment portfolio; they can also “follow” other users, like a social network, and even copy their investment strategies. The platform presented a feature, called CopyTrader, expressly with this function. There are also guides, tutorials and other educational materials for those who want to learn more about investing in financial markets. The most successful traders will be able to become influencers themselves within the platform.
In 2016, the concept brought by eToro had arrived at Forbes. In an interview with the renowned business magazine, Yoni Assia revealed that she learned everything about finance and trading from her father, during her adolescence. At the beginning of his adult life, he realized that for most people it would be impossible to access the same level and detail of information about the material he himself had received. That was the impulse to create eToro, at a time when the very idea of social networks was receiving the first strong impulse. Assia points to concepts of transparency, "consumerization" of financial markets and technology as a way to increase the financial literacy of ordinary people.