eToro Aims for $4 Billion Valuation in US IPO

eToro, an Israel-based stock and crypto trading platform, has announced its intention to go public in the United States with an initial public offering (IPO) aiming for a valuation of up to $4 billion. The company plans to raise $500 million by offering 10 million shares, priced between $46 and $50 per share. This strategic move is part of eToro's efforts to strengthen its presence in the retail trading market and compete with established competitors like Robinhood Markets Inc.

The IPO filing with the US Securities and Exchange Commission details that eToro will offer 5 million shares, with an additional 5 million shares being sold by existing stockholders. These stockholders include the company’s co-founder and CEO, Yoni Assia, his brother and executive director, Ronen Assia, and venture firms such as Spark Capital, BRM Group, and Andalusian Private Capital. eToro aims to list on the Nasdaq Global Select Market under the ticker “ETOR.”

Some BlackRock funds and accounts have shown interest in purchasing up to $100 million worth of shares at the IPO. Additionally, eToro has reserved 500,000 shares to be sold through a directed share program, typically targeted at employees. The company reported a substantial increase in its crypto revenue, with earnings from crypto trading reaching $12.1 billion in 2024, up from $3.4 billion in 2023. eToro expects crypto to account for 37% of its commission from trading activity in the first quarter of 2025, down from 43% in the year-ago quarter, indicating a strategic shift towards diversifying its trading offerings.

eToro’s IPO plans were initially delayed due to market volatility following tariff announcements in April. The company had made confidential filings with the SEC in January and publicly announced its IPO plans on March 24. However, the market uncertainty caused by the tariffs led to a pause in the IPO process. Other crypto companies, such as stablecoin issuer Circle and crypto exchange Kraken, have also been considering public offerings, with Kraken reportedly accelerating its plans in response to the market conditions.

The IPO is being led by a consortium of investment banks, including Goldman Sachs, Jefferies, UBS Investment Bank, and Citigroup. These financial institutions will play a crucial role in facilitating the public offering and ensuring its success. eToro has also highlighted several risks associated with its business, particularly in the crypto sector. The company warned that negative perceptions of cryptocurrencies, either due to media coverage or significant losses, could lead to a decrease in user engagement or difficulty in attracting new users. Additionally, eToro noted that state-level crypto regulations could strain its resources and make it challenging to operate in certain jurisdictions. The company also expects to incur significant costs due to the European Union’s Markets in Crypto-Assets (MiCA) laws.

Despite these challenges, eToro’s IPO represents a significant milestone for the company and the broader retail trading industry. The successful execution of the IPO will not only provide eToro with the necessary capital to expand its operations but also position it as a major player in the competitive retail trading market. This move underscores eToro's ambition to capitalize on the growing interest in retail trading and crypto investments, positioning itself as a key competitor in the market.