Israeli online investment platform eToro will complete its acquisition of fintech startup Gatsby after the US Financial Industry Regulatory Authority (FINRA) gave its approval. This was reported by the tech news portal TechCrunch. The deal is worth $50 million in cash and common stock.
eToro’s acquisition of Gatsby was first mooted in December 2021. It is part of eToro’s larger expansion into the US market and joins eToro’s other major acquisitions since 2019. The Israel-based fintech acquired investment tracker Delta, British e-money company Marq Millions Ltd, which built and launched eToro Money, eToro’s e-money account, and Firmo, a smart contracts/blockchain company which became eToro Labs, the in-house blockchain innovation and R&D unit.
Founded in 2018, startup Gatsby operates an app for commission-free options and stocks trading aimed at younger traders. The app was launched for iOS and Android in early 2020. Gatsby aims to give people “a safe and fair platform to trade without users having to worry about being overwhelmed or being locked out of names during spikes in volatility,” writes TechCrunch.
Target group: young investors
Yoni Assia, CEO and co-founder of eToro, told TechCrunch that the purchase would allow his company to expand the offering of its US product, which is currently focused on stocks and crypto. eToro has seen impressive growth over the past few years. The company currently has more than 30 million registered users in over 100 countries.
The acquisition is seen as key in the fight for customers from a growing group of younger investors – especially in the US and against the financial services provider Robinhood, one of the leading trading platforms for commission-free trading and one of eToro’s main competitors. At the end of June, there were reports that crypto exchange FTX was interested in acquiring Robinhood. This has not been specifically so far.
Rather, Robinhood stock has recently fallen in value, and the company has laid off about 1,000 employees since the beginning of the year. Just over a year ago, Robinhood collected around 2.1 billion US dollars when it went public – despite previous misconduct and penalties. Mergers and acquisitions in the fintech world are on the decline, writes TechCrunch, calling the eToro/Gatsby deal “a bright spot in a year of ups and downs.”
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