UK-focused stock trading platform Etoro is exploring a New York IPO at a valuation of more than $3.5bn (£2.7bn) despite doing most of its business in Europe.
The Israel-based firm’s founder and chief executive, Yoni Assia, told the Financial Times that it was considering a public listing in either New York or London amid a spike in activity on its platform.
Assia said a US listing would give the company access to a broader range of investors than a presence on the UK market.
As London’s stock market struggles with heavy investor outflows, several big names including insurer Aspen, gambling group Flutter and commodity broker Marex have been tempted by the deeper pool of capital offered across the pond.
“Retail investors in the UK and Germany want to trade US stocks,” Assia added. “We see that UK clients might trade also UK shares, but very few of our global clients would trade UK shares. Something in the US market creates a pool of both deep liquidity and deep awareness for those assets that are trading in the US.”
Assia said there was still a chance the company could float in London given its UK focus, with around 70 per cent of Etoro’s revenues coming from Europe.
Retail investors can trade stocks, currencies, commodities and crypto on Etoro’s platform. Assia said the firm was experiencing a surge in trading activity not seen since the “meme stock” craze in 2021 as US and European stock indexes post bumper gains and the price of bitcoin hits record highs.
New York’s tech-heavy Nasdaq 100 is up nine per cent so far this year amid an AI-fuelled rally, while the FTSE 100 is down one per cent.
Shares in Arm, the UK-based chipmaker that snubbed the LSE last year, have more than doubled since its IPO last September. Its current market capitalisation of $135.2bn (£105.1bn) would make it the fourth-biggest stock on the FTSE 100 if it were listed in London.
An Etoro IPO in London would be a major boost to the capital’s flagging stock market, which saw just 23 listings last year. This figure was down from 45 in 2022, which itself was a 62 per cent drop compared with a record 119 IPOs in 2021.
Assia said he was still “exploring the right timing” for an IPO and expected a higher valuation than $3.5bn (£2.7bn) from its most recent funding round in 2023.
Etoro made a $10.4bn deal with a special-purpose acquisition company when it first tried to go public in 2021. Assia said the broker scrapped the plans in 2022 after realising “the markets aren’t there”.
He said Etoro had not decided whether to allow its customers to invest directly in the IPO, like rival Robinhood did in 2021.
“Unlike Robinhood, all their customers are US-based [and] they did a US IPO, our customers are mostly European, UK, Asian,” Assia said. “To give access to US IPOs in European markets is a very different infrastructure.”