Robinhood rival eToro agrees $120 million share sale at discounted valuation
Stock trading platform eToro agreed to a $120 million secondary share sale, giving the company a slightly lower valuation than the $3.5 billion it was valued at in a primary funding round earlier this year.
The Israeli digital brokerage, which offers users trading in stocks, crypto, and contracts for difference, gave early employees and angel investors a chance to sell shares to some of eToro's existing investors, according to a memo to employees obtained by CNBC.
The round is a secondary share sale, meaning the company hasn't issued any new shares and won't net any income from the transaction. However, it's an indicator of the price investors are currently willing to pay to own shares of the firm.
It comes after eToro last year scrapped its plans to go public in a merger with a blank-check company, Fintech V.
The deal would have valued the company at $10 billion, but a downturn in equity and crypto prices threw a spanner in the works, as investors reassessed their exposure to tech and retail brokerages suffered a slump in trading activity.
«As a business which continues to demonstrate sustainable, profitable growth we are considered an attractive investment opportunity by many investors,» Yoni Assia, eToro's CEO and co-founder, said in the Monday memo to employees.
«This secondary transaction will give existing shareholders in eToro and veteran employees who have vested options the opportunity to sell a proportion of their shares to these purchasers.»
«This is not a primary i.e. eToro is not raising money — rather it is a moment for some long standing shareholders and employees to take some liquidity. As always, please maintain confidentiality and do not share any details of this potential transaction with anyone.
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