eToro has secured $250 millionin new funding months after its failed attempt to go public through a merger with the special purpose acquisition company (SPAC), FinTech Acquisition Corps. V. Thefunding brings eToro’s valuation to $3.5 billion, the Israeli social tradingnetwork disclosed on Tuesday in its latest financial results.
According to eToro, the fundingoriginates from an Advance Investment Agreement (AIA) it entered in February2021 as part of the proposed SPAC transaction. Participants in the new fundinground include ION Group, SoftBank Vision Fund 2, Velvet Sea Ventures and anumber of other existing investors.
Finance Magnates reports thateToro in March 2021 confirmed its plans to go public at a valuation of $10.4 billion through this mergerwith the blank-check company. However, the deal fell through in July last year after both companies failed tomeet certain conditions stated in their agreement.
Furthermore, in November last year, FinTechAcquisition Corp. V announced that it was dissolving and liquidating the blank-check company after the deal failed, with plans to close down by December 9, 2022. The SPAC company,which was owned by Betsy Cohen, a well-known financier and the Founder ofJefferson Bank and The Bancorp, also said it will return the $250 million itcollected from investors.
eToro’s Total Commissions ShrinkAlmost Half to $631M in 2022
Meanwhile, in the financialresults released on Tuesday, eToro reported a decline of approximately 49% ingenerated commissions. Total commissions came in at $631 million last year,dropping significantly from the $1.23 billion generated at the end of2021.
The shrinkage came despite a 17%year-over-year growth in eToro’s funded accounts which jumped to 2.8 million in2022. This is up from 2.4 million in the prior year. However, compared to 2020, thetotal commissions grew by 5%.
According to eToro, while almost half(48%) of the commissions generated in 2022 came from equity trading, over aquarter (27%) were generated from commodities trading. In addition, the contribution of commissions fromcryptocurrency trading dropped to 19%. Moreover, currencies accounted forthe smallest commission, contributing to only 6% of eToro’s purse.
The drop in commissions came ina year when the global cryptocurrency industry was hit by a number of chaotic eventsincluding the collapse of Earth-MOON and the cryptocurrency exchange, FTX which ensnared digital asset lenders such as Genesis.
However, Meron Shani, eToro’sChief Financial Officer (CFO) says that the company’s “underlying business isprofitable, and our balance is strong.” On top of that, Yoni Assia, eToro’s Founder and CEO, pointed out that the company year-to-date had seen an improvement in totalcommissions and profitability compared with the previous quarter “with higherengagement and trading activity from our users.”
“The diversified nature of ourmulti-asset product offering ensured that commissions from equities andcommodities partially offset the decrease in commissions from crypto assets in2022,” Shani explained.
“It’s also worth noting that wewere not impacted by the liquidity concerns which plagued many in the cryptoindustry,” the CFO added.
eToro has secured $250 millionin new funding months after its failed attempt to go public through a merger with the special purpose acquisition company (SPAC), FinTech Acquisition Corps. V. Thefunding brings eToro’s valuation to $3.5 billion, the Israeli social tradingnetwork disclosed on Tuesday in its latest financial results.
According to eToro, the fundingoriginates from an Advance Investment Agreement (AIA) it entered in February2021 as part of the proposed SPAC transaction. Participants in the new fundinground include ION Group, SoftBank Vision Fund 2, Velvet Sea Ventures and anumber of other existing investors.
Finance Magnates reports thateToro in March 2021 confirmed its plans to go public at a valuation of $10.4 billion through this mergerwith the blank-check company. However, the deal fell through in July last year after both companies failed tomeet certain conditions stated in their agreement.
Furthermore, in November last year, FinTechAcquisition Corp. V announced that it was dissolving and liquidating the blank-check company after the deal failed, with plans to close down by December 9, 2022. The SPAC company,which was owned by Betsy Cohen, a well-known financier and the Founder ofJefferson Bank and The Bancorp, also said it will return the $250 million itcollected from investors.
eToro’s Total Commissions ShrinkAlmost Half to $631M in 2022
Meanwhile, in the financialresults released on Tuesday, eToro reported a decline of approximately 49% ingenerated commissions. Total commissions came in at $631 million last year,dropping significantly from the $1.23 billion generated at the end of2021.
The shrinkage came despite a 17%year-over-year growth in eToro’s funded accounts which jumped to 2.8 million in2022. This is up from 2.4 million in the prior year. However, compared to 2020, thetotal commissions grew by 5%.
According to eToro, while almost half(48%) of the commissions generated in 2022 came from equity trading, over aquarter (27%) were generated from commodities trading. In addition, the contribution of commissions fromcryptocurrency trading dropped to 19%. Moreover, currencies accounted forthe smallest commission, contributing to only 6% of eToro’s purse.
The drop in commissions came ina year when the global cryptocurrency industry was hit by a number of chaotic eventsincluding the collapse of Earth-MOON and the cryptocurrency exchange, FTX which ensnared digital asset lenders such as Genesis.
However, Meron Shani, eToro’sChief Financial Officer (CFO) says that the company’s “underlying business isprofitable, and our balance is strong.” On top of that, Yoni Assia, eToro’s Founder and CEO, pointed out that the company year-to-date had seen an improvement in totalcommissions and profitability compared with the previous quarter “with higherengagement and trading activity from our users.”
“The diversified nature of ourmulti-asset product offering ensured that commissions from equities andcommodities partially offset the decrease in commissions from crypto assets in2022,” Shani explained.
“It’s also worth noting that wewere not impacted by the liquidity concerns which plagued many in the cryptoindustry,” the CFO added.
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