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By Manya Saini and Prakhar Srivastava
(Reuters) -Israel's eToro reported a 46% surge in commissions for 2024 as the retail trading platform filed for a U.S. initial public offering late on Monday, joining a wave of firms seeking to test investor appetite for fresh listings.
After years of sluggish activity, the IPO market is expected to see a long-awaited revival in 2025, with a pipeline of high-growth companies aiming to go public.
Easing interest rates and renewed risk-taking have increased optimism, but analysts say the market's rebound hinges on the success of marquee listings.
"Management and owners are clearly seeing a 'window of opportunity' to take their companies public now," said Josef Schuster, CEO of IPO-focused investment indexes, IPOX.
Retail trading surged in 2024 as equity markets hit record highs, fueled by a resurgence in risk appetite among investors.
Enthusiasm for stocks and cryptocurrencies was amplified by easing recession fears, strong corporate earnings and expectations of Federal Reserve rate cuts.
Online brokerage firms reported a sharp uptick in trading volumes, with options and speculative bets gaining traction as individual investors returned to the market in force.
Founded in 2007, eToro operates a trading platform that allows users to invest in stocks, cryptocurrencies and other assets while mirroring the strategies of top investors.
Its total commission jumped to $931 million in the year ended December 31, compared with $639 million a year earlier. Profit was $192.4 million versus $15.3 million in the year-ago period.
"The IPO will provide the company with the flexibility to potentially expand beyond crypto to capture the generational opportunities opening up from the rise of the retail investor globally," Schuster said.
The trading platform had scrapped plans to go public in 2022, after eToro and Betsy Cohen-backed FinTech Acquisition mutually agreed to terminate their merger deal through a special purpose acquisition company.
Strong debuts from buzzy tech and consumer-facing firms could reignite broader dealmaking, while a lukewarm reception may keep issuers on the sidelines.
In March 2023, eToro raised $250 million in a funding round that valued the online brokerage at $3.5 billion.
The company plans to list on the Nasdaq under the ticker symbol "ETOR".
Goldman Sachs, Jefferies, UBS and Citigroup are the lead underwriters of the offering.
(Reporting by Manya Saini and Prakhar Srivastava in Bengaluru; Editing by Alan Barona and Krishna Chandra Eluri)
