Israel-based Retail FX and CFDs broker eToro is apparently considering another attempt to go public in 2024, after its previous IPO attempt (via SPAC merger) was pulled in mid-2022.
In an interview with the US business news website CNBC Last week, eToro CEO Yoni Assia said,
“We are definitely looking at street markets. I definitely see us eventually becoming a public company. When is the ideal time to do this? We always evaluate the right opportunity at the right time and the right market.”
eToro financial results for 2023
CNBC said it showed data from eToro that indicates this eToro generated $630 million in revenue in 2023just a shade below the $631 million in revenue eToro previously said it had in 2022. That followed a nearly 50% drop in revenue from 2021 to the $1.2 billion range as eToro cut marketing spending and as revenues related to cryptocurrency trading declined.
However, unlike 2022, which ended with an undisclosed loss for eToro, in 2023 eToro showed positive EBITDA in the region of $100 million, although the company did not disclose a figure for actual profits or losses for 2023 .
eToro revealed that it now has approximately 35.5 million registered users and over 3 million funded accounts. The firm said it surpassed $10 billion in total client assets under management in 2023.
eToro is increasing its use of AI
Yoni Assia also revealed to CNBC that eToro has acquired a company called Deep that provides content automation, which has become a focus area for the broker heading into 2024. Assia said that eToro is increasingly using artificial intelligence in its activities, particularly in content and marketing. He said it around 80% of eToro’s entire marketing framework, graphics, content and localization incorporate AI.
eToro valuation
The issue of going public raises the issue of valuation again, whether for eToro or any other company considering an IPO. In the initial SPAC merger deal with Betsy Cohen’s Fintech Acquisition Corp V signed in March 2021, eToro was set to go public at a valuation of $10 billion as its revenue grew even amid mounting losses.
This valuation was later renegotiated to the $8-9 billion range in an attempt to restructure the deal (which would have required significant outside investment from private investors), but ultimately in July 2022 eToro’s IPO was canceled.
Last summer eToro helped facilitate some private secondary sales of shares for its employees and other existing shareholders (who were hoping to “liquidate” with the IPO), with Israeli business news site Bullets reporting that these 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 competition for eToro is probably another Israeli-based online broker, Plus500 (LON:PLUS), which has a similar revenue base to eToro ($726 million in 2023). Plus500 trades at a market capitalization 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 ranging from $540 million to $1.58 billion for eToro – well below its previous attempt of $10 billion.