Etoro Group Ltd. · NASDAQ:ETOR
Etoro — SPAC Merger (March 2021)
62 slides from Etoro's SPAC merger presentation, Mar 16, 2021
Slide 1: Next Generation Social Investment Platform
‘etoro* Next Generation Social Investment Platform
Slide 2: Disclaimer: Forward-Looking Statements
02 ‘etoro* Disclaimer Cautionary Statement Regarding Forward-Looking Statements This presentation contains certain forward-looking statements within the meaning of the federal securities laws with respect to the proposed business combination between FinTech V and eToro. Forward-looking staternents m
Slide 3: Disclaimer
03 ‘etoro* Disclaimer The financial information included in this presentation has been taken from or prepared based on eToro's historical financial statements. eToro's historical financial statements have been audited by Ernst & Young in accordance with generally accepted auditing standards in israe
Slide 4: Our vision and mission
04 ‘etoro* Our vision Opening the global markets for everyone to trade and invest in a simple and transparent way Our mission Building the world's largest social trading network to empower people to trade and invest in stocks, crypto and global markets, copy top traders and get copied
Slide 5: eToro at a glance
‘etoro* eToro at a glance $605M 1.2M 1,100 2020 revenue (147% YoY growth) Funded accounts. Employees Registered users Funded accounts by region 18.7M 17.5M @ Europe 69% 12.3M @ Asia Pacific 18% 10.0M - 8.1M @ Americas 8% 5.6M - a i a i @ Middle East & Africa 5% 2016 2017 2018 2019 2020 JAN 2021 05 s
Slide 6: Transaction Overview
‘etoro Transaction Overview
Slide 7: Today's Presenters
‘etoro* Today's Presenters FinTech Acquisition Corp. V Betsy Z. Cohen Chairman of the Board | 40+ years experience Chairman of FinTech Acquisition Corp IV and V Previously Chairman of FinTech Acquisition Corp | I, and Ill Previously CEO and Founder of The Bancorp Bank Daniel G. Cohen Chief Executive
Slide 8: Overview of FinTech Acquisition Corp. V
08 ‘etoro* Overview of FinTech Acquisition Corp. V Strong strategic partner Leader in the SPAC market Experienced leadership team e Impressive track record cardconnect +90% return from IPO to sale to First Data in Jul-2017 Source: Public Filings, FactSet @ Sponsor team brings deep expertise in FinTe
Slide 9: Transaction summary and implied sources & uses
09 ‘etoro® Transaction summary Implied sources & uses ($M) SOURCES Trareaction’ © eToro to merge with FIV through a reverse subsidiary merger; Existing evoro shareholder aqui ® ‘exe neers FIV to become wholly-owned subsidiary of eToro and eToro to become a Ganncainaie oo publicly-traded company e Pr
Slide 10: Company Overview
‘etoro Company Overview
Slide 11: eToro team, management & board
eToro team managemen t & board Founders Management Shalom Avi Tuval Etay Nir Jonathan Miri Sant o Politi Avne r Stepak Edd y Shalev Berkovitz Sela Chomut Cohen Smulewicz Dayan Kedem CFO& Deputy CEO Yon i Assia CE O & Boar d Member coo Chie f Solutions Officer Ronen Assia Executive Director V P Custo
Slide 12: We created a new category and we're dominating it
We created a new category and we're dominating it Stats Portfolio Social Trading \ \ \ ' ' ' ' ' ' ' ' ' ' ' ' ' ' .... .... ... . .... .... .... ... . .... .... WrJRLD EC )NOMIC F DRUM ''The next generation of retail and social trading platforms offer effective means for individuals to share or sel
Slide 13: Our global footprint
Our global footprint ,. · Blockchain lab R& D center - - LOCA L OFFICE LOCA L OFFICE FINANCIAL CONDUCT AUTHORITY LOCA L OFFICE • • • • • CYPRUS SECURITIES AND EXCHANGE COMMISSION IN APPLICATION PROCESS O A B U D H A B I GLOBAL MA KET W I ',!4£ > 1 191J.1 - Ll W A Jorwtan \ 11thoril) ofSi11gapon Mobi
Slide 14: Company history and milestones
ivit y Feed 1Jv 1 e s made o, WiteYour Ke y Statistics Ge., 12.62% Prof - Weeks 66.67% ;!::f/ posibo n w e ha Ma x Weekly Drewdown - 0.20 % Drive n b y a passio n for finance an d technology 87 tedKmgdom Fo l l owers OJ)<ers Act A l l aC '1 ClmgYl>"t u,. ailed ifflOUnts. 214 15 - 0 0 GMT tY \ % . .
Slide 15: A growing community of investors
18.7M A growin g community o f investor s who connect and learn from each other Registered users have access to a free virtual account allowing them to practice their investing skills and, once they have acquired confidence, progress to investing real capital. 5.6M 4.7M 4.0M 3.3M 2.5M 1.9M 1.1M 174K
Slide 16: The strong momentum continues in 2021
‘etoro* The strong momentum continues in 2021 Monthly registrations (Average) 1,223K 440K 2019 2020 JAN 2021 Monthly registrations: Jan 2020 - 296K; Jan 2019 - 129K 16 Monthly trades (Average) 75M 27M 2019 2020 JAN 2021 Monthly trades: Jan 2020 - 17M; Jan 2019 - 7M 2019 and 2020 figures are the annu
Slide 17: The Opportunity
The Opportunity
Slide 18: Huge and growing TAM supported by secular trends
18 ‘etoro* Huge and growing TAM supported by secular trends Digital platforms increase market share e Acceleration of digital transformation @ 72M millennials - the largest generation in US history ———— @ =©$30T will pass from US boomers to heirs urces: BGC: Global Wealth Report 2020; Accenture: The
Slide 19: Crypto is going mainstream
2020 2019 • C r y p t o s t aking Crypt o i s goin g mainstream We are seeing increased adoption of cryptoassets from financial institutions and corporates. eToro is well - positioned to benefit from the expanding crypto market. • L aunc h of c ry pto portfo l ios • D e l t a ac q u i s i t i o n f
Slide 20: Our community
Our community 34 Median age 79% O f ou r user s inves t in crypto, stocks or copy a s thei r first action 9 min Session duration O f ou r user s trade accross more than one product type 4 Logins per day 20 2020 figures related to funded accounts
Slide 21: Signing up in their early 30s and growing into our club program
‘etoro Signing up in their early 30s and growing into our club program eToro Club provides an enhanced investment experience with a membership offering that includes: $478K expert investment support, market analysis tools and exclusive events. $968 Median age basal 45 —— Bronze ve Gold Platinum Plat
Slide 22: Product Overview
‘etoro Product Overview
Slide 23: Our product
• • • ƒ ' Search S& P 500 3,443 . " +0 . 48 % Our product On eToro you can trade by yourself, copy other successful investors or invest in a Smart Portfolio. DOW30 29,915.44 + 0 . 3 3 % DOW30 29,915.44 +0 . 33 % NASDAQ 11,590.44 +3 . 85 % Investment Opport uni ties Explore Global Markets 9 : 41 - •
Slide 24: Magical product delivered
‘etoro* Magical delivered product of (a f 4. Interact and ,, 5. Copy Popular engage with Py ‘ . Investors |] fe 1. Fast & frictionless onbo ‘ONLINE PAYMENT Starbucks Coffee 2. All you want to f is : f r 6. Get copied and grow trade in one place ii A your financial business 24 3 i j
Slide 25: Trading and social experience
John Trading experience Amy Social & CopyTrading experience $6,672.84 MAI..At3U $ 2,766 . 11 RO I $135,644 . 95 EOU > My Watc h l i st v T 0 MARKET CHART PRICE B GOOG Alphabet 1,740.18 • 7 . 06 1 2 . 8 4% 1 C l AAPL Apple . _,..,., 128.91 • 1 . 9 7 1 1 . 0 3% 1 BTC B,rcoin 36,554 . 55 • 0 . 01 1 7 .
Slide 26: Portfolio and Popular Investor dashboard
John's portfolio Viewing and managing all assets and positions Amy's portfolio Viewing and managing also the CopyTrading investments Popular investor dashboard Stats and tools t o grow th e audience o f copiers an d AUM P l Das h b o a rd Las t 30D v L E V E L * ELITE Vi ewYour Benef i ts KE Y METRI
Slide 27: Our Popular Investors
Our Popular Investors With eToro's CopyTrader technology, users can automaticall y replicate othe r investors ' action s in real time. Value for the Popular Investor: • Earn as you attract more copiers and gather more assets • Global exposure and reputation building • Dedicated performance monitorin
Slide 28: Smart Portfolios
Ŷ Ŷ Smart Portfolios Today, people want to invest in ideas they feel passionate about. eToro has developed a one - of - a - kind investment product to support this demand: Smart Portfolios. .a.71.15% RETURN ( 12M ) [I] RISK These ready - made strategic portfolios make it easy for anyone, from active
Slide 29: eToro Money
eToro Money I n lin e wit h ou r goa l o f creating a holisti c customer experience, in 2021 we plan to introduce an eToro debit card, which will connect directly to a customer's account, and enable instant deposit and withdrawal, alon g wit h additiona l services. Your Monthly Expense Bill SJ6,524.
Slide 30: Expanding eToro in the US
‘etoro Expanding eToro in the US Ww aN B Vv ® 2019 Launched our social network and cryptoassets 30 —~=s5 bP / / Finra? Financial Industry Regulatory Authority 2020 Received FINRA broker dealer license , wv @ i 2021 Launching stocks and CopyTrading
Slide 31: Multi Channel Marketing Strategy
Multi Channel Marketing Strategy
Slide 32: Our customer journey
‘etoro* Our customer journey From onboarding to engaging and learning from other investors in the social network, to activating a funded brokerage account. Toric awwer Pre $100,000 ecto siaataas , any a = = Bre -aaett 209.51 tig vector conpret he = re 2 . Stone ae vy ot “ Saeee, Full trading and on
Slide 33: Building the eToro global brand
33 ‘etoro Building the eToro global brand We build a holistic brand strategy by actively investing in sport sponsorships, outdoor media, vast digital channels, main social media sites and our own partner network. f vw G (2)
Slide 34: Marketing investment returned in 3.5 months
‘etoro* Marketing investment returned in 3.5 months 2017 cohort © Cumulative cohort revenue © Marketing expense $613M 59 IN CUMULATIVE REVENUE as IN FOUR YEARS (On $103M marketing investment) 3.5 MONTHS TROI $103M 2017 2018 2019 2020 TRO! - Time to return on (marketing) investment 2017 cohort - new
Slide 35: 2020 marketing spend expected to return more than 4.5x
35 ‘etoro* 2020 marketing spend is expected to return more than 4.5x in revenue 2020 cohort © Cumulative cohort revenue @ Marketing expense $998M IN CUMULATIVE REVENUE x4.5 IN SIX YEARS (On $221M marketing investment) 5 MONTHS TRO! $221M 2020 2021 2022 2023 2024 2025 TROI-Time to return on (marketin
Slide 36: Business Overview
‘etoro Business Overview
Slide 37: How we generate revenue
37 ‘etoro* How we generate revenue © Trading revenue The trading revenue includes the spread, which is the difference between the Buy and Sell prices of a certain asset, and it is charged when a new trade is opened. Trading revenues derived from equities, crypto and contracts for difference. @ Inter
Slide 38: A true multi-asset investment platform
A true multi - asset investment platform Revenue split by asset class 2017 - 2020 2017 2018 2019 2020 • Equities • Commodities • Cryptoassets • Currencies Equiti es include stocks and indices. Revenue inc l udestrad i ngrevenue and interest i ncome . 38
Slide 39: 78% revenue CAGR (2016-2020)
39 ‘etoro* 78% revenue CAGR (2016-2020) 2017 and 2018 were boosted by strong crypto demand 0417 78% Crypto $263M $369M 2018 Qi18 58% crypto $244M 2019 $605M 2020
Slide 40: Annual P&L 2016 - 2020
40 ‘etoro Annual P&L 2016 - 2020 Profit & Loss Highlights ($M) Revenue Growth (%) Trading income (cost) Net revenue Marketing cost Revenue net of marketing Salary Overheads Payment processing fees Total operating expenses EBITDA 2016 29.5% 2017 263 338% 22 285 103 182 33 18 17 68 114 2018 369 40% 19
Slide 41: 2020-2025 Plan
2020-2025 PLAN
Slide 42: Data driven methodology
Data driven methodology Revenue Expenses • ARPU and retention rates are based on historical client behavior. • Growth in equities and crypto as portion of average portfolo similar t o recent years' trend. • US broker dealer - conservative market penetration assume d wit h gradua l rollout o f produc
Slide 43: Stable ARPU and retention over time
$2,500 $2,000 $1,500 $1,000 $500 $0 43 ‘etoro® Stable ARPU and retention over time Accumulated average revenue over time @ 2017 @ 2018 + @ 2019 @ 2020 ® Model Average monthly churn 2017 2018 2019 2020 2021-2025 2.8% 1.5% 1.5% 1.5% 1.5% $1,138 $566 012 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2
Slide 44: Marketing investment expected to return in two quarters
‘etoro* Marketing investment is expected to return in two quarters... 2021 cohort © Cumulative cohort revenue © Marketing expense $1,626M IN CUMULATIVE REVENUE 1) IN FIVE YEARS (On $392M Marketing Investment) 5.5 MONTHS TRO! $392M ..and to continue generating o00 2059 0 00h mn7e more revenue in the
Slide 45: Clear path to sustained growth
‘etoro* Clear path to sustained growth in the short and long term End of year funded accounts Revenue pay $2,548M am $1,988M 3.6M a; $1,552M 30% 2.7M % $1,196M $1,018M t 30% $605M 33% 0.5M a- 83% a. UT% 2019 2020 2021 2022 2023 2024 2025 2019 2020 2021 2022 2023 2024 2025 45 2020 figures are unaudit
Slide 46: eToro 2020 - 2025 P&L highlights
‘etoro eToro 2020 - 2025 Profit & Loss Highlights ($M) 2020 2021 2022 2023 2024 2025 Revenue 605 1,018 1,196 1,552 1,988 2,548 Growth (%) 167% 68% 17% 30% 28% 28% Trading cost -61 -211 -206 -263 -328 -397 Net revenues 544 807 990 1,288 1,660 2,151 Marketing costs 229 422 496 587 690 829 Revenue net
Slide 47: Appendix
Appendix
Slide 48: Compelling relative valuation
48 ‘etoro* Compelling relative valuation Selected Peers 2020-2022 net revenue CAGR EV / 2022E Net revenue Growth adjusted EV / 2022E net revenue Source: Company Public Information and Eikon as of 12-Mar-2021, ‘etoro’ 35% 0.3x eToro/ FIV High-growth FinTech PayPal adyen bill Ashopify afterpaya7 Semon
Slide 49: Senior Advisory Board and risk management framework
Senior Advisory Board Risk management framework supported by domain experts and robust technology • Audit & Risk Committee • Compensation, nomination and corporate governance Group Board of Directors J . Christopher Giancarlo Prof . Shmuel Hauser Salomon Sredni Dr. Hedva Ber Former Former Former For
Slide 50: Risk factors (1/12)
50 ‘etoro Risk factors (1/12) Certain factors may have a material adverse effect on our business, financial condition and results of operations. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently
Slide 51: Risk factors (2/12)
51 ‘etoro Risk factors (2/12) 6. We operate in a highly competitive industry where many of our competitors may have product suites and/or pricing schemes that may appeal to our current or potential customers. If we are unable to compete effectively, we may lose our market share and our results of op
Slide 52: Risk factors (3/12)
52 ‘etoro Risk factors (3/12) 13. We are exposed to risks relating to the availability of capital to fund our working capital, including regulatory capital requirements, margin requirements and required advances to payment providers, and the possibility that we will be unable to meet financial oblig
Slide 53: Risk factors (4/12)
53 ‘etoro Risk factors (4/12) Risks Relating to the Regulation of Our Business . 4. Our business is subject to an extensive, complex, overlapping and constantly changing regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect ou
Slide 54: Risk factors (5/12)
54 ‘etoro Risk factors (5/12) * Non-compliance with laws and regulations, for example with respect to financial services licensing, gambling (if relevant), the marketing or offering of our products or services to customers and consumer protection legislation in the jurisdictions of our customers, co
Slide 55: Risk factors (6/12)
55 ‘etoro Risk factors (6/12) 3. For certain jurisdictions in which we operate or provide services to customers, we have relied in part or entirely on the advice of counsel with respect to regulatory matters. This legal advice may be inconclusive or incorrect and subject to change, while the laws an
Slide 56: Risk factors (7/12)
56 ‘etoro Risk factors (7/12) 8. Our collection, use, storage, disclosure, transfer and other processing of personal information could give rise to significant costs and liabilities, including as a result of governmental regulation, conflicting legal requirements or differing views of personal priva
Slide 57: Risk factors (8/12)
57 ‘etoro Risk factors (8/12) 3. We currently support, and expect to continue to support, certain smart contract-based digital assets. If the underlying smart contracts for these digital assets do not operate as expected, they could lose value and our business could be adversely affected. 4. if mine
Slide 58: Risk factors (9/12)
58 ‘etoro Risk factors (9/12) 3. Although we place many resources to secure the redundancy of our systems and platforms, our systems and platforms may not be fully redundant. System failures could harm our business. 4. Our intellectual property rights are valuable, and any inability to protect them
Slide 59: Risk factors (10/12)
59 ‘etoro Risk factors (10/12) Risks Related to Our Operations in Israel 1. Relations between Israel and the other jurisdictions from which we operate and the various jurisdictions in which our customers reside could materially affect our business. 2. Potential political, economic and military insta
Slide 60: Risk factors (11/12)
60 ‘etoro Risk factors (11/12) Risks Related to the Business Combination 1. FinTech Acquisition Corp. V ("FTV") may not have sufficient funds to consummate the business combination. 2. We have not yet entered into a definitive agreement for a business combination and, when we do, the completion of t
Slide 61: Risk factors (12/12)
61 ‘etoro Risk factors (12/12) 2. Our management team has no experience managing a public company. 3. We will incur increased costs as a result of operating as a public company, and our management will devote substantial time to new compliance initiatives. * Our management is required to devote subs
Slide 62: Thank You
Thank You