eToro, a trading platform, has managed to secure funding of $250 million at a valuation of $3.5 billion- which was announced by the company on the 21st of March.
The firm which is based in Israel also raised this capital for the first time since 2018- after it had failed to go public the previous year through a special purpose acquisition company manager. Most of the participants in this round included the SoftBank Vision Fund 2, ION Group, Velvet Sea Ventures, and a few other existing investors.
According to the firm, the funding system does stem from a variant of the Advance Investment Agreement- which was entered in the early party of 2021– which was also a part of the proposed SPAC transaction. For those wondering, the AIA is a legal agreement between the company and the investor who has committed to the company.
eToro Has Received A Massive Funding
After signing for an AIA, the company and the investors have agreed on the key terms that would dictate the investment upfront. As for the company eToro, the investment was supposed to be carried forward for a couple of years after the signature, and under a few specific requirements- such as not going through a SPAC transaction, or raising any form of additional capital. Since neither of the possibilities materialized, the AIA deal did move forward.
In 2021, eToro and Fintech V went ahead and announced the takeover of SPAC, where the trading platform was valued at $10 billion, However, the downturn in the markets of cryptocurrency has readily affected the plans of the firms. The previous July, both Fintech V and this firm had announced a bilateral agreement that would terminate the merger. According to the firm, the commissions amounted to a sum of $631 million in 2022, which was down by 49% from 2021, and up by just 5% when compared with 2020.