eToro keeps its US options open and buys Gatsby

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eToro has acquired a US options trading app called Gatsby for what’s believed to be around $50.0 million.

The company applied for approval for the transaction, with US regulators, back in December but it took until now for FINRA to sign off on the deal.

Gatsby is a commission-free trading app that is targeted toward millennial and Gen Z investors, which in theory should mean it’s a good fit within the wider eToro ecosystem.

What is Gatsby?

Gatsby was founded in 2018 and had previously raised money from venture capitalists via a series A funding round that garnered $10.00 million.

Customers who trade options through the app can earn reward points which can be redeemed for cash at the end of each month. They can also trade the options market with their friends using the platform’s functionality to share ideas and swap information.

According to Gatsby’s blog page, the average user of the App is 28 years old, and many of them are still in college, and the platform is specifically designed to suit this demographic.

However, the app is only available to US citizens, permanent residents, or those with qualifying US visas.

What’s happening to Gatsby’s founders and staff?

Gatsby co-founders Jeff Myers and Ryan Belanger-Saleh will join eToro alongside a number of senior Gatsby staff members.

eToro CEO Yoni Assia was quoted as saying :

“Scaling our US business is a strategic focus for eToro and through Gatsby, we can provide US users with access to a safe and simple way to trade options, which we know are particularly attractive in challenging markets.”

Of course, eToro had harboured far grander plans for its US expansion,  via a direct listing in New York, through a merger with a SPAC, or special purpose acquisition company effectively a cash-rich shell.

However, the much anticipated Nasdaq listing fell foul of US regulatory requirements and the deal, which was initially valued at $10.00 billion, was shelved in June.

During the pandemic rival margin trading broker, IG Group spent $1.0 billion to acquire options brokerage and educator Tastytrade.

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