How eToro Got Ready to Go Public

CEO Yoni Assia says he beat Elon Musk by 10 years when it comes to adding bitcoin to the balance sheet.

Mar 16, 2021 at 2:20 p.m. UTC
Updated Sep 14, 2021 at 12:27 p.m. UTC

Ahead of an upcoming public listing announced Tuesday, eToro saw explosive growth at the start of 2021.

Over 2020, eToro grew its revenue 147% year over year, with the crypto trading business accounting for 16% of revenue, said CEO Yoni Assia.

“Obviously we started this year with a bang thanks to the crypto rally,” Assia told CoinDesk in an interview. “In January 2021 we added 1.2 million new registered users to the network versus an average of 440,000 per month in 2020, and a 192,000 monthly average in 2019.”

The merger with a special purpose acquisition company (SPAC), which elevates eToro’s value to around $9.4 billion, will drive an aggressive expansion plan, said Assia, with “hundreds of positions” to the current 300 staff being added over the coming year.

“Globally, we're very excited about our expansion in the U.S., both the triple-digit growth rate we're seeing right now in the U.S. as well as our expected launch of equity in the U.S.,” he said.

The firm has made several acquisitions in the crypto space including asset tokenization startup Firmo and Delta, a crypto portfolio tracker application company, both in 2019. 

During an investor call Tuesday, eToro said 87% of total revenue in 2020 were generated from the spread of buy and sell prices of assets. The residual revenue were derived from interest income from margin position, currency, conversions and other income, the firm said.

The eToro social investment platform was launched back in 2010, and the firm was one of the earliest to get into cryptocurrency. Before any cryptocurrency was added to the trading platform, Assia began to buy and hold bitcoin, he explained.

“We bought some crypto for our treasury 10 years before Elon Musk for between $5 and $20 back in 2011. Unfortunately, we only bought about $50,000 back then. But that enabled us to become the first regulated brokerage in Europe to offer cryptocurrency trading back in 2013,” he said.

Even assuming all were bought at $20, eToro would have a trove of 2,500 BTC – worth over $138 million at today's prices.

It may be the perfect time for companies that handle cryptocurrency to go public, but eToro was around for the last bull run and the "winter" that followed. 

The firm said it grew its business significantly during the first crypto rally of 2017-2018 and has extended its equities business, which grew from 11% of revenue in 2017 to 44% of revenue in 2020. 

“I think for us, what we learned from the crypto winter, is the importance of diversification,” Assia said. “A significant amount of users joined eToro during a crypto rally in 2017, and many are still active on eToro today in trading both stocks and cryptocurrencies.”

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.