eToro Targets $4 Billion Valuation With $500 Million IPO

eToro Group, an Israel-based stock and crypto trading platform, is targeting a valuation of up to $4 billion with its upcoming Initial Public Offering (IPO) in the US. The company, along with its existing stockholders, aims to raise $500 million by offering a total of 10 million shares priced between $46 and $50 per share. The IPO is set to take place on the Nasdaq Global Select Market under the ticker “ETOR.”

eToro's filing with the US Securities and Exchange Commission reveals that the company is offering 5 million shares, while the remaining 5 million shares are being put up by key stakeholders, including 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. The company has also set aside 500,000 shares for a directed share program, typically aimed at employees.

eToro's IPO comes at a time when the company is experiencing significant growth in its crypto trading revenue. In 2024, the company reported crypto revenue of $12.1 billion, a substantial increase from $3.4 billion in 2023. The company 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. This shift indicates a growing diversification in eToro's revenue streams, although crypto remains a critical component of its business.

eToro's IPO plans were initially delayed due to market volatility following President Donald Trump’s tariff announcements in April. However, the company has since resumed its IPO preparations, led by a consortium of investment banks including Goldman Sachs, Jefferies, UBS Investment Bank, and Citigroup. The company's decision to proceed with the IPO reflects its confidence in its financial performance and market position, despite the challenges posed by regulatory uncertainties and market fluctuations.

eToro's filing also highlights several risks associated with its business, including the potential for negative perceptions of cryptocurrencies to drive users away. The company warns that media coverage or significant losses could impact its user base. Additionally, eToro notes that US state-level crypto regulation and the European Union’s Markets in Crypto-Assets (MiCA) laws could strain its resources and make it difficult to operate in certain jurisdictions. These risks underscore the need for eToro to navigate the complex regulatory landscape and maintain its competitive edge in the rapidly evolving crypto market.

eToro's IPO is poised to compete with other major players in the retail trading sector, such as Robinhood Markets Inc. The company's focus on both stock and crypto trading positions it as a versatile platform for retail investors, offering a wide range of investment options. The successful execution of this IPO could further solidify eToro's status as a leading platform for both traditional and digital asset trading, paving the way for future growth and innovation in the sector.