Various business news sources in Israel are reporting that eToro’s plans to go public via a merger with a special purpose acquisition company (SPAC) are in trouble, and that the Israel based Retail FX and CFDs broker is now looking at funding alternatives.

News site Bizportal (bizportal.co.il) has gone as far as reporting that eToro has indeed cancelled its planned merger with the SPAC Fintech Acquisition Corp V (NASDAQ:FTCV). Another source, Calcalist (calcalist.co.il), stated this morning that while eToro continues to work to complete the SPAC merger, it is also in “advanced stages” of completing a private funding round of between $800 million-$1 billion, at a valuation of $5-6 billion.

eToro agreed to the going-public merger with Fintech Acquisition Corp V more than a year ago, in March 2021 in a transaction that also was to inject several hundred million dollars into the company (and into eToro shareholder hands), at a valuation of more than $10 billion for eToro.

However that deal – which has yet to be completed – was struck in a very different market. eToro’s US rival Robinhood (NASDAQ:HOOD) was then in process of prepping its own IPO, which it completed last summer at a valuation of $32 billion. Robinhood’s shares have since plummeted from a high of $85 in August to just about $10 today, giving the company a valuation of $8.7 billion.

Other online brokers in both the US and Europe have seen their shares hit and valuations cut over the past couple of months as the stock market has been heading toward bear territory, with investors and traders fearing rising inflation and hitting high-growth, low-profit ventures the hardest. Complicating things further, quite a number of previously-completed SPACs are trading well below their issue price, leading those who put money into still-existing SPACs (such as Fintech Acquisition Corp V) to reject suggested mergers in favor of just getting their money back, which they have the right to do.

eToro already once agreed to lower its valuation in the SPAC deal, at the end of 2021, from $10 billion down to $8.8 billion, but getting that deal done at those terms now seems unlikely. Neither eToro nor Fintech Acquisition Corp V have yet made any formal filings about more adjustments to their agreement, or the planned timing of the deal.

eToro posted a net loss of $265 million in 2021, with its SPAC-IPO related expenses piling up to the tune of about $75 million. As the company grew, its Marketing expenses more than doubled from $229 million (in 2020) to $524 million, while Personnel related expenses ballooned from $37 million to $238.6 million.