The Forex market is abuzz with rumors that famed broker eToro is currently in talks with Goldman Sachs to lead a $5 billion IPO, as originally reported by Calcalist.
While eToro declined to comment, it is widely speculated that the company aims to complete the offering by the end of Q2 2021, and is even seeking to merge with a special purpose acquisition company to accelerate its entry into Wall Street.
The Israel-based broker, known for its investment management platform and unique cryptocurrency trading options, was last valued at $2.5 billion and has gained 5 million new clients since the beginning of 2020, totaling 17 million customers. Despite the worldwide economic decimation caused by COVID-19, eToro more than tripled its stock trading volume since January 2020 and doubled its revenue to $500 million. In fact, eToro's success may be attributed in part to the financial crisis, which has pulled young investors into the stock market and saw the market's general public trading volume rise from 10%-15% to over 20%.
eToro claims it serves traders in 140 countries, which is not surprising given that eToro is regulated by entities in Cyprus, Australia, the United Kingdom and the United States. Licensure by CySEC, the Cyprus Securities and Exchange Commission, allows eToro Europe to cater to its European base, which is especially important in a post-Brexit world.
Since its inception in 2007, the multi-asset broker made waves in the marketplace with the development of its proprietary management platform for private investors. For other traders, eToro offers over 2,000 assets across six categories and 93 cryptocurrency choices, in addition to CFD trading. The company has positioned itself as the leader in cryptocurrency trading markets. In 2019, eToro acquired Firmo, a Dutch blockchain company, and Delta, a Belgian crypto portfolio tracker app developer.
Two of eToro's most unique and popular features, as cited by its clients, are its CopyTrader and CopyPortfolios programs. With CopyTrader, traders can dedicate a portion of their capital to copy successful trades made by others. Throughout the trade, the trader retains complete control, including the discretion to exit the trade at any time. In a similar vein, CopyPortfolio enables traders to copy the portfolios of bundles of assets and hedge funds.
Should eToro indeed pursue an IPO, no doubt there are many in the market who would look forward to the broker as an investment opportunity.