eToro suffers a SPAC setback

Online trading platform eToro could be the latest fintech company to cancel plans to go public, as multiple reports signal it is planning a new round of funding at a significant discount to its previous valuation.

Why it matters: The SPAC boom has gone bust, and eToro is the latest casualty of a market that has turned against new fintech listings.

Flashback: eToro first announced plans to go public through a merger with blank check acquisition company FinTech Acquisition Corp. V over a year ago at a valuation of $10.4 billion.

• In December, the firms extended their deadline to complete the deal to June 30 but cut eToro's valuation to $8.8 billion.

Driving the news: With that deadline fast approaching and little appetite for new fintech listings, eToro is expected to cancel its SPAC merger and seek a new round of private financing.

• While the amount it hopes to raise is uncertain, what is clear is that any new funding will come at a lower valuation even to its December write-down, probably in the $5-6 billion range, according to reports.

Context: eToro isn't the only fintech company to deal with recent fallout in the public markets.

• In January, Acorns called off its SPAC plans and later raised $300 million in private funding at a $1.6 billion valuation.
• And, in February, Brazilian payments firm Ebanx canceled its IPO plans.
• Meanwhile, shares in eToro competitor Robinhoood have fallen more than 70% since its IPO last July.