ETX Capital the London based margin Forex trading platform and Spread Betting broker is diversifying its offering with the acquisition of Fintech company Oval Money Ltd.
Through its app Oval money encourages its users to save, invest and take control of their finances through rule-based systems.
Oval Money has 100,000 active monthly users and has raised rounds of funding totalling £7.95 million, at today’s exchange rates, including a crowd-funded round of £1.318 million in December 2019.
The business was co-founded by a trio of Italians Edoardo Benedetto, Benedetta Arese-Lucini and Claudio Bedino in 2016 and has offices in both London and Turin.
ETX Capital has not disclosed what it has paid for the new business and the wording of press releases and emails about the deal is such that they suggest that Oval Money’s 6 employees won’t necessarily be joining ETX themselves.
By acquiring Oval Money, ETX will be able to offer a new range of products and services to its client base. This is the first deal that ETX has made since it was acquired by Swiss-based Guri Capital in 2020, though it may not be the last, as Guru Capital’s team said they were keen to grow ETX through acquisition at the time of their takeover deal.
ETX has already been diversifying its services and has participated in several equity placings and fundraisings for small to mid-size London Stock Exchange-listed companies
on behalf of ETX clients.
The latest move is probably a stepping stone to test the water among its client base for traditional financial services, before perhaps a bigger pivot towards the embedded finance model, that has driven the growth of businesses such as Revolut.
In truth London based FX and CFD brokers have been slow to capitalise on their brands and customer bases and where they have tried to do so they have often met with mixed results.
That said IG Group, eToro and Plus 500 have all recently taken steps that will allow them to operate in the USA and we would expect to see more deals being done in 2021. Not least because regulators may yet crackdown further on the traditional sources of revenue for Spread Betting and margin trading firms,
Quite why the margin trading community has been resistant to diversification up to this point is unclear but companies such as Drive Wealth providing Fintechs with turn-key, one-stop solutions for share trading and other services, it may soon become a case of adapt or die.
Darren is a veteran of the financial markets with almost 36 years of experience under his belt. He has worked in trading, sales, analytical, and research roles, he has been a regular guest & commentator on financial television channels and publications. During his career, Darren has been fortunate to act for and advise major hedge funds and investment banks as well as HNWI. Darren analyses the markets using a blend of technical and fundamental analysis