eToro CEO Yoni Assia was quoted over the weekend by UK business news website Financial Times (ft.com) saying the company is considering going public in an IPO this year after seeing customer transaction volumes grow in recent weeks to “levels of activity not seen since 2021.”
The fact that trading activity on social-focused eToro is on the rise shouldn’t come as too much of a surprise, as the online broker seems to have done very well over time with the cryptocurrency trading crowd. Cryptocurrency trading among retailers has picked up in early 2024 as Bitcoin and Ether prices have roared back. Bitcoin briefly breached the $70,000 level late last week to set an all-time high, while Ether is nearing $4,000 for the first time since late 2021.
According to Assia, eToro has yet to decide where to list, weighing alternatives that include New York (either NYSE or NASDAQ) and London. He also said the company is aiming for a valuation of at least $3.5 billion – well below the $10 billion valuation that eToro sought to go public in 2021-2022 via a SPAC merger (which ultimately failed to materialize), but above from eToro’s recent private market valuation to a series of share sales last summer by employees and long-term investors.
Assia had made similar comments about an eToro IPO last month to US business source CNBC, but without a specific location or valuation details.
Our own analysis (absent updated financials for eToro) at the time of the CNBC interview was that valuation between $540 billion and $1.58 billion for eToro it made more sense. The best comparison for eToro is probably another Israeli-based online broker, Plus500 (LON:PLUS), which has a similar revenue base to eToro – $726 million in 2023, compared to $630 million reported for eToro , which was almost identical to the company’s revenue on a 2022 basis. Plus500 trades at a market cap of around £1.45 billion (US$1.84 billion), or around 2.5 times LTM revenue and 5.4 times EBITDA. Using these metrics on eToro would result in a valuation range of between $540 billion and $1.58 billion for eToro, as noted above.