Crypto Trading Platform eToro Takes Step Toward U.S. IPO Filing

eToro, a leading trading platform for both stocks and cryptocurrencies, is preparing for its highly anticipated Initial Public Offering (IPO) on the New York Stock Exchange (NYSE), as reported by Financial Times. The platform, which primarily serves retail investors, is aiming for a valuation of $5 billion and may go public as soon as the second quarter of this year.

The firm has enlisted Goldman Sachs, Jefferies, and UBS as advisers for the IPO process. If successful, eToro would join a small group of publicly traded companies in the U.S. that facilitate cryptocurrency trading, including Coinbase (COIN) and Robinhood (HOOD). However, eToro’s market capitalization would be significantly smaller than both of those companies, with Coinbase valued at $69 billion and Robinhood at $40 billion.

The target $5 billion valuation represents a sharp decline from eToro’s initial target in 2021, when the company sought to go public through a merger with a special purpose acquisition company (SPAC) valued at $10.4 billion. The SPAC deal was canceled in late 2022 due to market challenges.

In 2023, eToro secured $250 million in funding, but its valuation fell to $3.5 billion. Despite the drop, the company’s valuation has rebounded, supported by the recent rally in cryptocurrency and equity markets. However, it also faced regulatory scrutiny, and eToro settled with the SEC by paying $1.5 million to resolve accusations of operating as an unregistered broker and clearing agency and facilitating transactions involving certain cryptocurrencies as securities.

While the company hasn’t disclosed its exact crypto trading volume, Finance Magnates reported a dramatic 500% increase in its cryptocurrency trading volumes through November 2023.

Founded in Israel in 2007, eToro now manages $11.3 billion in assets across more than 3 million customers. These assets include a mix of cryptocurrencies, stocks, and exchange-traded funds (ETFs). Following the SEC settlement, eToro limited its U.S. offerings to only Bitcoin (BTC), Bitcoin Cash (BCH), and Ether (ETH).

The company has not commented further on its IPO plans but is poised to make waves in the crypto trading industry with this move.