EToro Said to Near $10 Billion Merger With Betsy Cohen SPAC

Crystal Tse, Bloomberg News

(Bloomberg) -- Trading platform eToro, a rival to Robinhood Markets Inc., plans to go public via a merger with a blank-check firm led by serial deal-maker Betsy Cohen, according to people with knowledge of the matter.

The deal with FinTech Acquisition Corp. V will value the combined company at about $10 billion, the people said, asking not to be identified because the matter is private. The companies are raising about $650 million in equity to support the deal, which could be announced as soon as Tuesday, they said.

Representatives for eToro and FinTech Acquisition V declined to comment.

The company became a member of the U.S. Financial Industry Regulatory Authority Inc., or FINRA, in the last year and is expected to start providing stock trading service in the U.S. in 2021, the people said.

eToro has 20 million registered users in dozens of countries, according to its website. Founded in 2007, it expanded into the U.S. in 2018.

Just like its rivals, it offers zero-commission trading. Unlike U.S. firms, eToro doesn’t make money by selling its trading data to hedge funds in a business called payment-for-order flow, a practice that is prohibited in Europe. Instead, eToro primarily pockets a spread between the price its pays for securities and the price it passes along to customers.

It also brands itself as a “social trading” network, where investors can share their opinions and market exploits, and copy bets of best-performers on the system.

Fintech Acquisition Corp. V rose 40% in after-market trading Monday. The stock closed up 1.7% to $10.71, giving the company a market value of about $366 million.

The special purpose acquisition company raised $250 million in December. Cohen, its chairman, has been involved with several blank-check companies, including one taking boutique investment bank Perella Weinberg Partners public.

(Updates shares in second to last paragraph)