Business

Cannon-Brookes-backed millennial super fund Spaceship snapped up by eToro in $80 million merger

- September 27, 2024 3 MIN READ
Andrew Moore
Spaceship CEO Andrew Moore
Global trading platform eToro is getting into the Australian superannuation business after acquiring the controversy-plagued investment app Spaceship Capital in a deal worth up to $80 million.

The price is a blow to investors such as Airtree, which previously valued the fintech at more than $100 million.

Investment in Spaceship has been opaque, but may exceed the price paid by eToro.

Spaceship kicked off in 2016 with $1.6 million from tech titans including Atlassian’s Mike Cannon-Brookes, Aconex founder Leigh Jasper, software entrepreneur Simon Clausen, and Showpo founder Jane Lu.

Crunchbase reported a $20 million Series A in November 2017 backed by Airtree, Rampersand and Amalfi Capital, with the business raising $41 million in total. Spaceship was reportedly valued at $170 million at the time.

But other media reports at the time suggested Spaceship raised $19.5 million in June of that year from the likes of US billionaire and Paypal cofounder Peter Thiel and the Future Fund, and then an additional $50 million at the end of 2017.

Spaceship’s CEO at the time said the company had a policy of not commenting on its fundraising.

But it did publicly announce subsequent rounds, including $10m in August 2020 and more recently, $6 million in July 2023 in an extension to an existing convertible note facility from two of its major shareholders, Grok Ventures and Horizons Ventures. That topped up $7.5m raised in mid-2022. At the time the fintech had $1.3 billion in FUM and 22,000 Spaceship Super customers.

App-based Spaceship Capital, launched in 2017 as Spaceship Super, although the bulk of the fintech’s customers are on the Spaceship Voyager platform, launched in 2018, which offers managed investment portfolios, with more than $1.5 billion in funds under management. The business says it has more than 200,000 clients.

But the company soon felt the wrath of regulators, and in 2018, was fined for false and misleading conduct by the the Australia Securities and Investment Commission (ASIC) over its superannuation product statements. Its tussles with ASIC continued until as recently as last year, when interim stop orders were placed on both the super and investment products stopping the onboarding of new customers for 11 days before the order was revoked on June 30, 2023.

Former CEO and cofounder Paul Bennetts, departed in 2019, and was banned in 2022 from the financial services sector for six years by ASIC, for dishonestly obtaining his company director (AICD) qualification.

ASIC slapped a ban on another director, but it was subsequently overturned by the Administrative Appeals Tribunal.

In January 2023, the company shed jobs and rearranged its management in a bid to cut its operating costs.

Andrew Moore, who took over as CEO in May 2019, said the M&A deal was a pivotal moment for Spaceship.

“We’re deeply aligned with eToro’s goal of making investing accessible for everyone, and this partnership will enable us to reach new heights as we expand our product offering to customers, while continuing to provide top-tier value,” he said.

“Moreover, it offers our customers a promising opportunity to be part of a forward-looking company that aligns with our future ambitions.”

eToro Australia MD Robert Francis said said the acquisition shows the company’s commitment to the local market.

“By combining Spaceship’s superannuation proposition with eToro’s multi-asset investment offering, we can better support our users throughout their investment journeys,” he said.

The merger will give eToro users access to Spaceship’s superannuation products, while Spaceship customers will eventually gain access to their new owner’s investment platform, which offers equities, funds, ETFs, commodities and crypto.

eToro, founded in 2007, has around 38 million registered users in 75 countries.

The Spaceship brand will live on for now in a gradual integration that will give eToro clients the ability to sign up to super fund through the eToro app.