eToro and FinTech Acquisition Corp. V Announce Merger

March 19, 2021
Kevin Larkin

Large scale mergers between technology and finance companies seems to be a match made in heaven ever since last year when fintech hit an explosive growth spurt. eToro is currently a privately owned trading application that has announced it is going public in a merger with V SPAC, which is according to Business Insider, “A Special Purpose Acquisition Company (SPAC) is a company created solely to merge or acquire another business and take it public.” eToro is one rival of the infamous US based trading company’s Robinhood, and hopes to gain more ground on them with this decision. For those unaware, at the beginning of this year, there was a massive spike in popularity for the video game retail store GameStop (GME) where tons of people joined together to purchase and dramatically raise the price of the stock. This was an issue for some as it was widely agreed upon that GameStop was a failing business so many large investors were shorting the stock. This resulted in many of them losing a ton of money, and Robinhood made the decision to stop users from being able to purchase GME stock, which left a sour taste in many mouths. Unable to gain their full support and customer base back after that incident, now seems like the perfect time for eToro to strike and take a commanding lead in the space.

This merger has been estimated to be worth over €8.7 billion, with around €8 billion of that being attributed to eToro. eToro offers commission-free trading, is now available in over 100 countries worldwide, which has resulted in over 20 million current active users. They currently offer cryptocurrency trading services but plan to expand to stocks later in 2021. The pandemic has perhaps been one of the biggest accelerators in expanding the investing world, as more novice members are getting their feet wet in the trading world. Betsy Cohen, who is a chair member at FinTech Acquisition Corp. V, which is the SPAC involved in this merger, has stated that “In the last few years, eToro has solidified its position as the leading online social trading platform outside the U.S., outlined its plans for the US market, and diversified its income streams. It is now at an inflection point of growth.” This has made them an ideal candidate to partake in this merger and will hopefully result in a myriad of new services available and more novice traders gaining experience on the platform.

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