All the money is put in by existing investors, led by VC Spark Capital.
Retail Forex broker eToro announced this morning that it had raised an additional $15 million from its existing investors, led by Boston-based VC Spark Capital. Spark previously (in January 2011) led an $8 million round in eToro. This brings the money raised by eToro since inception to more than $30 million.
Spark Capital has a fairly good track record investing in "disruptive" web-based technologies and services, backing companies which include Twitter, Tumblr and Foursquare.
We understand that more than one outside investor also looked at putting money into the round, including a leading private equity firm, but at the end it didn't happen.
eToro has been around for a while, but only recently has seemed to hit its stride by integrating its own social network OpenBook, which it bills the world's "largest investment network" with more than 2 million registered users. Other Forex social networks, such as Currensee and FX Junction, are independent of other Forex firms and allow their members to register and trade (following "expert" traders on the network) with one of several Forex brokerage firms, and earn money essentially as IBs of those other firms. OpenBook funnels clients only to eToro.
To the best of our knowledge, the only other Forex firm with its own integrated social network is IBFX, which white-labels FX Junction's solution. (IBFX is owned by Tradestation which itself was acquired last year by Japan-based Monex Group). It will be interesting to see if other Forex firms follow eToro and IBFX's lead and develop their own social network / follow-the-leader type program, either by developing the software in-house or (more likely) licensing third-party systems, as IBFX did.
We recently wrote that several of the Forex social networks were having trouble turning membership into trading volumes and revenues. eToro's OpenBook has helped make eToro's website one of the most popular Forex-based sites, with an Alexa ranking of 1,638 (i.e., making eToro the 1,638th most popular website on the Internet globally). Comparing eToro's Alexa website popularity ranking versus other Forex social networks and leading Forex firms (with the lower the ranking the better):
For more on Forex social networks and the global Forex industry, as well as a list of Forex industry financings and M&A transactions dating back to 2005, see the LeapRate-Dow Jones Forex Industry Report.