eToro Agrees to Acquire TradeZero in $231M US Expansion, Stock Tanks 10%

TradeZero, founded in 2015, runs commission-free U.S. stock and options trading through its broker-dealer subsidiaries. For eToro, the appeal is the plumbing: next-generation trading platforms, broker-dealer infrastructure, an engaged trader community, and a door into the Canadian market. TradeZero operates across the U.S., Canada, and international markets.

eToro framed the purchase as a shortcut to new U.S. products. "Today's announcement is an important step in building our US business," eToro Co-Founder and CEO Yoni Assia said in a statement. "This combination gives us a faster path to launching new products for US customers and strengthens our offering. Together, we'll innovate faster as we continue building the global financial superapp for the next generation of users."

With this purchase eToro may be positioning itself for easier competition against bigger and more popular brokers. The company built its name letting retail users trade crypto and copy other investors, but U.S. equities have been a harder wedge. TradeZero brings the licensed U.S. rails and the active-trader base that competes head-on with Robinhood.

The consideration runs to up to $231 million, "consisting of cash and up to 2.5 million newly issued Class A common shares of the Company," per the release, subject to customary adjustments. TradeZero generated about $80 million in revenue with 81% gross margins over the last twelve months.