The marriage of convenience between the finance and technology sector continues to gain traction as Etoro seeks new investments from Chinese and Russian financial institutions.
Ping An, a Chinese financial services firm and Russian banking giant, Sberbank, are both believed to be investing in Etoro, a leading fintech firm that offers electronic and social trading solutions to global investors. The move highlights the growing interest in Israel’s technology startups from emerging market investors.
The two firms are believed to be in discussion with the social trading specialist provider. The Wall Street Journal reported that the firm was expecting to raise $15 million, following on from its earlier funding of $31.5 million from Spark Capital and BRM Capital.
Chinese firms have recently been exercising their global investment reach, the current move supporting China’s vision of diversifying its investments in various sectors across developed & emerging regions, including Israel’s booming technology sector. People close to the matter reported that the financial trading firm is expected to raise about $15 million from Ping An Insurance Group, Sberbank’s financial technology fund SBT Venture Capital and existing investors.
Beijing’s relationship with Israel has seen a recent spike in activity as Chinese investors look for guidance on technology and innovation. Government reports show that dealings between the two nations have been rising. Business dealings between the two made headlines after Chinese firm, Bright Food Group Co Ltd, acquired a stake in Tnuva, a domestic Israeli dairy firm. Israel is known as the world’s startup nation with its own dedicated high-tech district known as Silicon Wadi.
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Fintechs on the Rise
Fintech startups have been challenging the way banks and large financial institutions operate, the recent FX rigging scandal which saw the world’s largest banks face regulatory fines totaling $4.3 billion have highlighted the importance of technology as it brings a new layer of transparency. New startups such as peer-to-peer lending, money transfer and crowd funding companies have given hope to the ‘average jo’ public as they look to re-emerge in the world of finance without the banks.
Data from industry sources shows that fintechs have raised over $5 billion in capital injections. Zopa, a London-based lending firm states on its website that it has dealt in over $1 billion, supporting lenders and borrowers.
The Rise of Social Trading
Social trading is a recent phenomenon that is a by product of the growing interest in electronic and automated trading by retail investors. Social trading platforms incorporate all elements that are common to mainstream social media and social networking channels such as Facebook and Twitter, whereby investors benefit from viewing, sharing and following other investors.
A number of new firms have blossomed with robust technological solutions such as Zulu Trade and Tradency.