Israel based Retail FX and CFDs broker eToro is apparently looking at another attempt to go public in 2024, after its previous IPO attempt (via a SPAC merger) was pulled in mid 2022.
In an interview with US business news site CNBC last week, eToro CEO Yoni Assia was quoted as saying,
“We definitely are eyeing the public markets. I definitely see us becoming eventually a public company. When is the ideal time to do that? We’re always evaluating the right opportunity at the right time and the right market.”
eToro financial results for 2023
CNBC stated that it was shown figures by eToro indicating that eToro brought in Revenues of $630 million in 2023, just a shade below the $631 million in Revenue eToro earlier stated it saw in 2022. that followed a near 50% drop in Revenues from 2021 in the $1.2 billion range, as eToro cut back marketing spend and as crypto trading related Revenue waned.
However unlike 2022, which ended with an unstated loss for eToro, in 2023 eToro showed positive EBITDA in the range of $100 million, although the company did not disclose a figure for actual bottom line profit or loss for 2023.
eToro disclosed that it now has approximately 35.5 million registered users, and over 3 million funded accounts. The company said it crossed $10 billion in total customer assets under administration in 2023.
eToro increases use of AI
Yoni Assia also disclosed to CNBC that eToro has purchased a company called Deep that provides content automation, which has become an area of focus for the broker heading into 2024. Assia indicated that eToro has been increasingly using AI in its business, particularly in content and marketing. He said that around 80% of all of eToro’s marketing context, graphics, content, and localization integrates AI.
eToro valuation
The question of going public re-raises the issue of valuation, whether for eToro or any other company looking at an IPO. In its initial SPAC merger deal with Betsy Cohen’s Fintech Acquisition Corp V inked in March 2021, eToro was to go public at a valuation in the $10 billion range, as its Revenues surged even amidst growing losses.
That valuation was later renegotiated down to the $8-9 billion range in an attempt to restructure the deal (which would have required a significant outside investment from private investors), but ultimately in July 2022 the eToro IPO was cancelled.
Last summer eToro helped facilitate some private secondary share sales for its employees and other existing shareholders (who had been hoping to ‘become liquid’ with the IPO), with Israel business news site Globes reporting that those shares were changing hands based on a valuation of just $1.7 billion for eToro.
So what might eToro be worth today in the public markets?
The best comp for eToro is probably another Israel based online broker, Plus5oo (LON:PLUS), which has a similar Revenue base as eToro ($726 million in 2023). Plus500 is trading at a market capitalization of about £1.45 billion (USD $1.84 billion), or about 2.5x LTM Revenues and 5.4x EBITDA. Using those metrics on eToro would result in a valuation range between $540 million to $1.58 billion for eToro – well below its previous $10 billion attempt.
