Trading platform Etoro is planning to go public via a merger with blank-check firm FinTech Acquisition Corp. led by serial dealmaker Betsy Cohen, reports Bloomberg. The agreement values the combined company at about $10.4 billion.
The companies are raising about $650 million in equity to support the deal.
Investors in the equity transaction include ION Investment Group, Softbank Vision Fund II, Third Point LLC, Fidelity Management & Research Co., and Wellington Management.
Etoro is expected to start providing stock-trading service in the U.S in the second half of 2021
In the past year, brokerages have witnessed a surge in retail investors, who made up about 20% of U.S equity trading in 2020.
Etoro, which recognizes the importance of risk management and education on its platform, also considers adding options trading to its platform.
Unlike rivals, who make money through payment-for-order flow on customer orders, Etoro pockets earnings through securities’ spreads.
Etoro aims to keep its options open to new revenue streams and brands itself as a social trading network.
Founded in 2007, Etoro has 20 million registered users in dozens of countries and expanded into the U.S. in 2018.
The SPAC involved in the deal raised $250 million in December, and Cohen, its chairman, has been involved with several blank-check companies.