Thursday, November 20, 2014

Ping An to Invest in eToro, Israeli Online Trading Platform

Source: Wall Street Jurnal, By Orr Hirschauge

Chinese financial powerhouse Ping An and Russia’s largest lender Sberbank are in advanced discussions to back Israeli online trading company eToro, according to people familiar with the matter, as Chinese interest in Israel’s technology sector heats up.

The company is expected to raise about $15 million from Ping An Insurance Group, Sberbank’s financial technology fund SBT Venture Capital and existing investors, the people said.

The final amount of the investment has yet to be finalized, they said. As part of the move eToro is also expected to expand operations into China and Russia by providing its online trading platform through Ping An and Sberbank, the sources said.

eToro has previously raised about $31.5 million from various investors, including Spark Capital and BRM Capital. The deal would come as Chinese investors pour millions in Israel-focused technology investment funds and large financial institutions increasingly turn to startups for fresh ideas.

Ping An Ventures, the venture investment arm of China’s largest financial conglomerates, last November launched a $100 million fund dedicated to investing in U.S.-Israel technology companies. Yongjin Group a Chinese equity-investment management and financial-services company, has put between $15 million and $20 million into Israeli venture fund Pitango Venture Capital during the past year, according to The Wall Street Journal.

Chinese computer maker Lenovo invested about $10 million in venture fund Canaan Partners Israel, in August. Daniel Tu, chief innovation officer of the Ping An Group, recently visited Israel for a second time.

While he didn’t comment directly on the company’s intention to invest in eToro, he did speak about Ping-An’s general aims. Mr. Tu said: “Ping An is an integrated financial group and we embarked on an online strategy. We are always looking into fintech startups and companies like eToro make for an interesting target for us. They can help us and our clients.”

eToro, which was founded in 2007, enables retail traders to invest and share information about their trades, performance and strategies online. Much as on Twitter , social traders can “follow” each other and are updated on trades through a live feed or messages. They can also sign up to a service that will automatically copy trades of a top performer.

The company, which competes with firms such as ZuluTrade and Ayondo, aims to ultimately bridge the information gap between retail and institutional traders. It has four million users in 170 countries, according to information presented by the company this month. Ping An and Sberbank are one of several large financial institutions that have recently launched venture arms to invest in technology companies as they seek to keep up with the rapid pace of digital innovation. Sberbank launched its $100 million fund late last year to invest in young fintech firms, while U.K. bank HSBC this year allocated up to $200 million to invest in fintech firms. Shortly after Santander announced the launch of a $100 million fintech fund.

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