FTV Capital is investing $30 million in Edgewater Markets, marking the firm’s ninth deal in the past year.
FTV will take a minority stake in Edgewater, said Kyle Griswold, a partner at FTV.
New York-based Edgewater uses technology to distribute foreign-exchange rates to institutional clients globally, said CEO Skovran Schreder. Customers include banks, hedge funds and family offices. “This allows institutional clients to have efficient access to global liquidity very efficiently,” Schreder said.
The electronic foreign-exchange space is growing rapidly, said Griswold. He estimates the daily trading volume of the FX market at $5 trillion. Edgewater’s trading platform serves as an alternative to the platform offered by banks, which Griswold said are outdated and expensive to maintain.
Edgewater is on pace to grow its top line by 50 percent in 2016, Griswold said.
CEO Schreder and Alex Scarsini, president, founded Edgewater in 2009. They are selling part of their holding to FTV, Schreder said. Edgewater’s management team is staying and no job cuts are expected, Schreder said. The company will use the funds to invest in its sales team and expand technology, Griswold said.
Schreder said he was “very excited” that FTV invested in the company. “They’re very well known in the financial-technology industry,” he said.
Griswold declined to disclose Edgewater’s revenue or the size of its staff.
Bankers were not involved in the deal, which stemmed from a phone call placed by Brent Fierro, an FTV associate, last year, Griswold said. Investment talks began around the end of 2015, he said. “We have a lot of strategic relationships to help [Edgewater] build out their network on both sides,” Griswold said.
As part of the deal, Brad Bernstein, an FTV partner, will join Edgewater’s board, while Griswold will be a board observer.
FTV Fund V? Not just yet.
FTV, a growth-equity firm focused on enterprise solutions, payments and financial services, has invested in nine companies in the past year. Besides Edgewater they include StoneEagle, True Potential, Perfecto Mobile, NewsCred, CashStar, LiveIntent, WePay and Clearent.
Earlier this month, FTV also agreed to sell portfolio company CardConnect to FinTech Acquisition Corp.
FTV used its fourth fund, which closed at $700 million in 2014, to make all nine investments, Griswold said. CardConnect came from its third pool, which raised $512 million in 2008.
The firm’s fourth pool is about 70 percent invested, Griswold said. “I think we’ll be out fundraising in due course, but we don’t have specific plans.”
Performance data for the FTV funds was unavailable.
Action Item: To contact Edgewater: into
Photo courtesy of Shutterstock