The digital currency firm Etoro has revealed it is laying off 100 workers or roughly 6% of the company’s workforce. Furthermore, Etoro disclosed that the company is terminating the special purpose acquisition company (SPAC) merger planned with Fintech Acquisition Corp. Etoro says the company plans to raise funds privately now and aims to raise $800 million to $1 billion.
Etoro Cuts Staff, SPAC Deal Canceled
The Tel Aviv, Israel-based social trading and crypto investment platform Etoro is laying off around 6% of the firm’s staff. The company’s CEO and co-founder Yoni Assia said the decision was based on market conditions.
“Due to the current market conditions and after a period of accelerated growth we decided to take in the current period a more balanced approach between growth and profitability,” Assia said. “As a result, we made a difficult decision to cut our workforce in order to ensure long-term sustainable growth.”
Etoro was founded in 2007 by David Ring, Ronen Assia, and Yoni Assia and it provides traders with access to cryptocurrencies, commodities, indices, and stocks. To date, Etoro has raised $322.7 million from investors and has made three acquisitions.
While the company is shedding its staff by 6%, Etoro has also decided to halt the SPAC merger it planned with the blank-check company Fintech Acquisition Corp (NASDAQ: FTCV). Etoro had planned to have an initial public offering (IPO) via the SPAC deal but now plans to raise funds privately.
Allegedly, Etoro is already focused on obtaining private funding for $800 million to $1 billion and an overall valuation of around $5 billion. Prior to canceling the SPAC deal, it was estimated that Etoro’s valuation would be between $8.8 billion to $10.3 billion.
Since the SPAC merger termination was mutually agreed upon, neither party has to pay a termination fee.
Etoro’s Assia noted that the company is confident that the Israeli tech group will see continued growth. “We remain confident in our long-term growth strategy and excited for the future of Etoro,” Assia said in a statement.
Meanwhile, Fintech Acquisition Corp’s stock jumped this week after the news. FTCV is 0.10% higher than the day prior, and is currently exchanging hands for $9.86 per share.
Etoro’s layoffs follow Verbit reducing its staff by 10% after noting it will lay off 80 employees from the U.S. and 30 from Israel. Furthermore, numerous crypto companies have laid off workers including firms like Gemini, Bullish, Robinhood, Bitso, Crypto.com, 2TM, Buenbit, and Coinbase.
What do you think about Etoro’s decision to cut staff and cancel the SPAC deal? Let us know what you think about this subject in the comments section below.