eToro and Fintech V Reaches Agreement to Abandon Merger Agreement


Online brokerage eToro and Fintech V- a special purpose acquisition company (SPAC) have mutually agreed to abandon their proposed merger deal.

According to the details of the filing detailing the agreement, both parties failed to meet certain closing conditions, making it difficult to proceed with the merger.

From the merger agreement, eToro was meant to enjoy funds up to $650 million from the SPAC and other institutional investors. After it was initially announced in March 2021, the deadline for completion was pushed to the end of June 2022.

Fintech V’s chairman Betsy Cohen blamed the failure of the merger on circumstances beyond either party’s control. Although the merger agreement was not completed, Yoni Assia, eToro’s CEO said the firm remains healthy. 

Since none of the parties was responsible for the failure of the deal, there will be no need for a termination fee.

Here’s Why the Merger Agreement Failed

After eToro announced its plans to go public last year via a SPAC merger, Several issues hindered the parties from completing the conditions of the merger at the original valuation of $10.3 billion.

Earlier in January, Fintech V announced a 15% drop in the firm’s valuation bringing it to $8.8 billion. As a result, the amount of the expected funds in the merger agreement also dropped from $650 million to $443 million. 

With the fall in the SPAC’s valuation and the drop in the proposed amount, eToro would be better off raising funds privately rather than going public.

Consequently, the online brokerage is reportedly planning a private funding round. It expects to raise between $800 million and $1 billion, at a $5 billion valuation.

The failure to fulfill the requirements of the merger wasn’t entirely due to the drop in valuations of the companies. eToro could not also complete its submission filings with the U.S Securities in the stipulated time due to regulatory changes.

Founded in 2007, eToro is an Israeli-based social trading and investment firm. The firm allows registered users to invest in cryptocurrencies, stocks, commodities, and more. It also provides copy trading services.

The firm also launched a $20 million fund set aside to acquire blue-chip Non-fungible Token (NFTs). It will also fund upcoming creators and collections in the NFT world.

Joyce Onose
A Blockchain enthusiast and growing writer in the space with an understanding of the importance in creating quality content for readers in the industry. Also, keen on using her skills in improving Blockchain journalism.

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