A buyer has been found for venture capital-backed superannuation and investment fintech Spaceship, about 18 months after the company first sought to be acquired.
Spaceship has agreed to an all-scrip acquisition by Israel-founded online stockbroking platform eToro.
EToro operates in 75 countries, including Australia. EToro’s acquisition of Spaceship could be worth up to $80 million for existing investors if the business achieves its earnings targets.
Spaceship’s investors, who include Atlassian co-founder and chief executive Mike Cannon-Brookes’ Grok Ventures, Airtree Ventures and Hong Kong venture firm Horizons Ventures, have invested close to $60 million over eight years. Investors will, however, probably need to wait for eToro’s mooted public listing before they can access any returns.
In March, The Financial Times reported that eToro was seeking to float through a $US3.5 billion ($5.11 billion) IPO in New York or London.
EToro said the acquisition of Spaceship will strengthen its footprint in a key market while also broadening its product offering by bringing superannuation into its portfolio.
Spaceship claims 11% annualised returns for its GrowthX super product from launch in 2017 to the end of August 2024. Over this time, it had acquired more than 200,000 clients and now had more than $1.5 billion in funds under management, it said.
Spaceship Super was launched in 2017 and the following year Spaceship Voyager was launched. This product provides access to a selection of professionally managed investment portfolios. Last year the company added a new service which enables members to invest in US markets.
EToro chief executive and co-founder Yoni Assia said he hoped the Spaceship acquisition would be the first of many in the long-term savings and investing space.
Spaceship chief executive Andrew Moore said: “Joining forces with eToro is a pivotal moment for Spaceship, accelerating our momentum in Australia and unlocking new opportunities for growth.
EToro’s managing director for Australia, Robert Francis, said: “By combining Spaceship’s superannuation proposition with eToro’s multi-asset investment offering, we can better support our users throughout their investment journeys.”
The Spaceship brand will continue and integration of its products with those of eToro will take place gradually.
Both Spaceship and eToro were investigated by the Australian Securities and Investments Commission (ASIC) last year over allegations that they marketed their investment strategies to unsuitable classes of investors. ASIC temporarily banned Spaceship from accepting new customers or making investments. The ban was lifted after the company made changes to its target market determinations for its Spaceship Voyage portfolios.
ASIC accused eToro of marketing high-risk contract for difference (DFD) products to too broad a range of retail investors.
ASIC filed its case against eToro in the Federal Court in April. The matter is yet to be heard.
Back in 2022, Spaceship had been expected to seek a Series C funding round but this did not eventuate as interest from venture firms in investing in loss-making early-stage companies rapidly evaporated. This prompted the company to seek an acquiror.
Image: Spaceship chief executive Andrew Moore.