CommerzVentures GmbH, the Corporate Venture Capital subsidiary of Commerzbank launched approximately six months ago, has made its first investment in a fintech company, namely Israel’s social investment platform eToro Group Ltd.
CommerzVentures joined the venture capital arms of Russia’s Sberbank and China’s Ping An as a follower investor in the Series D financing of eToro. The total investment volume raised among the investors amounted to $39 million – eToro raised $27 million late last year from Sberbank and Ping An as well as existing eToro investors Spark Capital and BRM – meaning that an additional $12 million was raised today, coming from CommerzVentures as well as the existing investors. The $39 million total includes a credit line of $10 million by Silicon Valley Bank.
eToro was founded in 2007 with the vision of developing a platform that would open the financial markets to everyone by simplifying the user’s experience. eToro then developed a contracts for difference (“CFD”) trading platform, which was launched in 2008.
Following the rise of popular social networks, the company decided to launch its own social investing platform called “OpenBook” in 2010. The aim of social trading is to promote transparency by allowing traders from all across the globe to copy and learn from one another. To date, eToro has over 4 million registered users and offers hundreds of CFDs on currencies, stocks, indices, and commodities.
“At CommerzVentures we want to work with the best entrepreneurs who can articulate why they can dominate a given market segment. eToro is a perfect fit as it has firmly established itself as the leader in social trading and as it is run by ambitious and very talented management” said Stefan Tirtey, co-managing director of CommerzVentures.
Yoni Assia, eToro’s Co-Founder and CEO said, “These are truly exciting times for us at eToro as new partners begin to share our vision of recreating personal finance. The new funds raised will help us scale globally and grow faster than ever before.”
“With new offices opened and others soon to follow, we will continue to dominate the field of social trading. Later this year, we are planning to introduce a completely new platform alongside our revamped Popular Investors program. The program gives traders the opportunity to earn a monthly income from trading and being copied by others on our platform” concluded Mr. Assia.
The valuation for the December financing round was above $100 million, and the additional financing will push that even higher.
It is not easy for retail forex brokers to differentiate themselves in a very crowded market. eToro bills itself as the world’s largest social investment network, with 4 million registered users in more than 140 countries, with thousands of new accounts opened each day. The company clearly has good reasons to make these claims. Among the retail forex sector brokerage firms, eToro is clearly a leader and innovator when it comes to use of social media. eToro was one of the first brokers to introduce social networking among its clients, via its proprietary OpenBook.
And outside its own OpenBook network, eToro is also a leader in utilizing outside social platforms.
- Facebook – more than 900,000 likes
- Twitter – more than 60,000 followers
- Alexa – rank 4,200, lowest among all retail forex brokers
The eToro deal is coming on the heels of other capital raisings by retail forex brokers, such as the €77.5 million raise announced recently by Copenhagen-based Saxo Bank. That deal valued Saxo Bank at €1.25 billion.