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eToro is buying TradeZero. The deal is worth up to $231 million, paid in a mix of cash and up to 2.5 million newly issued Class A shares, subject to price adjustments. It’s the platform’s third acquisition of the year — and its first that has nothing to do with crypto.
TradeZero, founded in 2015, runs brokerage services aimed at active traders across the United States, Canada, and several international markets. Over the past year the firm pulled in around $80 million in revenue, holding an 81% gross margin — a number that would make most traditional brokerages envious. TradeZero’s Canadian branch picked up a meaningful milestone back in February 2022, when TradeZero Securities Canada got approved as a dealer member by Canada’s investment industry regulator, letting Canadian clients trade U.S.-listed stocks and options. The firm isn’t a stranger to headlines, though not always for good reasons. In May 2022, the SEC slapped TradeZero America with a $100,000 fine and hit co-founder Daniel Pipitone personally with a $25,000 penalty — both tied to public statements made during the meme-stock trading frenzy on January 28, 2021. The company didn’t admit or deny the findings.
TradeZero also tried going public once. A planned merger with Dune Acquisition Corp fell apart in 2021, leaving the firm unlisted.
Why eToro Wants This Deal Now
eToro’s pitch here is pretty straightforward: it wants deeper roots in U.S. equities, and TradeZero gives it a ready-made active-trader base. Net trading income from equities, commodities, and currencies climbed $27.6 million year-over-year to reach $141.6 million — so the direction of travel is already clear. Folding TradeZero in, per eToro, is meant to speed up new product launches for U.S. customers. That’s the plan, anyway.
The two earlier acquisitions this year — Zengo, a self-custody wallet maker, and Bit2C — were both crypto plays. TradeZero is different. It’s a traditional brokerage, and that’s kind of the point. eToro seems to be deliberately spreading its bets between digital assets and conventional financial products, rather than doubling down on one side.
The deal still needs regulatory approval and isn’t expected to close until the first half of 2027. No details yet on which regulators need to sign off or how long that process might take.
eToro’s Q2 Numbers Tell a Mixed Story
The financials eToro posted alongside this announcement are a bit of a mixed bag. Second-quarter net contribution rose 9% year-over-year to $229 million. But net income came in at $53.5 million — that’s 35% lower than the first quarter. The company said net income did benefit from reduced transaction costs compared to the prior year, which softened the blow somewhat.
Assets under administration dipped to $18.5 billion in July, which wasn’t a great look. Funded accounts, on the other hand, grew 18% to reach 4.32 million. So the user base is expanding even if the asset pile shrank a bit.
Crypto, though. That’s where things got rough. Trades in the crypto segment dropped 73% year-over-year. Revenue from cryptoassets fell 30%, and costs in that segment actually edged past revenue — meaning eToro was, at least for a stretch, losing money on crypto trades. That’s a stark contrast to the traditional equities side, where the numbers are moving in the right direction.
Cash on Hand and What Comes Next
eToro isn’t short on firepower. As of June 30, the company held $1.2 billion in cash and short-term investments. It’s also been buying back its own stock — $189.1 million worth of repurchases so far. That combination of liquidity and buyback activity says the company thinks it’s in solid shape, even with net income down quarter-over-quarter.
And it’s not done shopping. eToro said it continues to explore additional acquisitions, with wealth-tech targets apparently on the radar. The TradeZero deal fits that frame — it’s not a crypto bet, it’s a bet on active traders who want to move fast through equities and options markets. Whether that overlap with eToro’s existing user base turns into something meaningful is unclear yet.
TradeZero’s history of regulatory friction — the SEC fine, the failed SPAC merger — isn’t exactly a clean record. But eToro is clearly betting the operational profile and the revenue margin outweigh the baggage. At 81% gross margin on $80 million in revenue, it’s not hard to see why.
The $231 million price tag, with the share component still subject to price adjustments, means the final number could move. eToro’s stock price between now and the close in early 2027 will partly determine what TradeZero’s founders actually walk away with.
Frequently Asked Questions
How much is eToro paying for TradeZero?
eToro agreed to pay up to $231 million for TradeZero, with the deal structured as a combination of cash and up to 2.5 million newly issued Class A shares, subject to price adjustments.
Was TradeZero ever fined by the SEC?
Yes. In May 2022, the SEC fined TradeZero America $100,000 and co-founder Daniel Pipitone $25,000 over public statements made during the meme-stock trading restrictions on January 28, 2021. The company did not admit or deny the findings.
