Venture capital firm Spark Capital has realized a gain of approximately $530 million following the initial public offering of eToro Group Ltd., a social trading platform that went public this week with a $4.3 billion market capitalization.
According to filings, Spark was eToro’s largest shareholder, owning around 13% of the company at the time of the IPO. The firm had invested $19 million in the Israeli startup since 2010.
The listing, which marked the culmination of a 15-year investment, multiplied Spark’s stake 29 times, further enhanced by a 29% first-day share price increase. That gain alone added about $148 million to Spark’s valuation on top of its existing holdings. Spark sold a small portion of its shares during the IPO but retained the majority.
Long-Term Bet on Social Investing
Spark co-founder Santo Politi, who joined eToro’s board in 2010, said the firm endured “a lot of pain and suffering” over the years as eToro navigated a complex path to public markets. A previous SPAC deal in 2021 failed to materialize, and the company delayed its IPO again last month due to market uncertainty surrounding tariffs.
Politi said the investment aligned with Spark’s thesis of applying social media principles to finance, a strategy that led to earlier investments in platforms like Twitter and Tumblr.
Market Signals and VC Industry Impact
The IPO comes at a time when the venture capital sector is seeking liquidity. Public listings have slowed significantly since the 2021 tech IPO surge, leaving many firms unable to exit investments.
eToro’s strong market debut is seen as a positive sign for the industry. Its competitor, Robinhood, has seen shares rise 55% year-to-date, adding to investor optimism in the social trading segment.
Politi expressed hope that eToro’s success would encourage other startups to pursue IPOs. Spark is also an early investor in Discord, which is reportedly preparing for a public listing.
