Social investment platform eToro acquires smart contract startup Firmo
Firmo's platform enables exchanges to execute smart financial contracts across various assets, including crypto derivatives, and across all major blockchains. Firmo founder and CEO Dr. Omri Ross described the company's mission as “…enabl[ing] our users to trade any asset globally with instant settlement by tokenizing assets and executing all essential trade processes on the blockchain.” Firmo's only disclosed investment, according to data from Pitchbook, came in the form of a modest pre-seed round from the Copenhagen Fintech Lab accelerator.
Firmo's mission aligns well with that of eToro which is equal parts trading platform, social network and educational resource for beginner investors with the company having long communicated hopes of making the capital markets more open, transparent and accessible to all users and across all assets. By gobbling up Firmo, eToro will be able to accelerate its development of offerings for tokenized assets.
The acquisition represents the latest step in eToro's broader growth plan, which has ramped up as of late. Earlier in March, the company launched a crypto-only version of its platform in the US, as well as a multi-signature digital wallet where users can store, send and receive cryptocurrencies.
The Firmo deal and eToro's other expansion activities fit squarely into the company's belief in the tokenization of assets and the immense, sector-defining opportunity that it creates. Etoro believes that asset tokenization and the movement of financial services onto the blockchain are all but inevitable and the company has employed the long-tailed strategy of investing heavily in related blockchain and crypto technologies despite the ongoing crypto winter.
“Blockchain and the tokenization of assets will play a major role in the future of finance,” said eToro co-founder and CEO Yoni Assia. “We believe that in time all investible assets will be tokenized and that we will see the greatest transfer of wealth ever onto the blockchain.” Assia expressed a similar sentiment in a recent conversation with TechCrunch, stating “We think [the tokenization of assets] is a bigger opportunity than the internet…”
After the acquisition, Firmo will operate as an internal R&D arm within eToro focused on developing blockchain-oriented trade execution and the infrastructure behind the digital representation of tokenized assets.
“The Firmo team has done ground-breaking work in developing practical applications for blockchain technology which will facilitate friction-less global trading,” said Assia.
“The adoption of smart contracts on the blockchain increases trust and transparency in financial services. We are incredibly proud and excited that [Firmo] will be joining the eToro family. We believe that together we have a very bright future and look forward to pursuing our shared goal to become the first truly global service provider allowing people to trade, invest and save.”