eToro explored acquisitions and the possibility of applying for banking licences, or buying a bank, as part of a push to diversify into payment services, chief executive Yoni Assia told the FT.
STRATEGIC RATIONALE
According to the FT, the platform was working with investment bankers on two deals, expected "soon", to buy wealth-technology companies, one in the US and one elsewhere, while considering banking licences to expand further into payment services rather than lending. "We are very acquisitive — it is part of the reason why we listed," Assia said. "We have a number of potential deals we are looking at including businesses who would help us grow our wealth offering," he said.
REGULATORY AND MARKET IMPLICATIONS
Assia said any licence application or bank purchase would come in the future.
Assia said diversifying into payment services would also help hedge the business against swings in asset markets. The FT report described a strategic intent to diversify revenue.
Assia also predicted "a big wave of consolidation", saying "not all businesses will be able to exist as independent public businesses".
eToro's only major acquisition since its listing has been self-custody crypto wallet provider Zengo, which it bought for $70mn in April.
Sources: FT Financial Services
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