22nd Nov 2010. The OzForex Group, an online foreign exchange payments platform operating as a Macquarie Bank majority-owned subsidiary, today announced a minority growth investment from Accel Partners and The Carlyle Group. The funds will help accelerate OzForex’s expansion into North America, Europe and Asia, as well as the development of complementary product and service offerings.
The transaction closed on 19 November 2010. Financial details were not disclosed, however press reports indicate the transaction value to be A$70-100m. The announcement comes after Accel invested $60 million in Sydney-based software group Atlassian earlier this year.
The company’s founders and Macquarie Private Wealth, which is part of Macquarie Group Limited, are together retaining significant ownership of OzForex, and Neil Helm will continue as CEO. The self-funded company has been profitable since inception, with operating profit having grown at a compounded annual rate of more than 40 percent. Macquarie Private Wealth, which bought a majority share in 2007, and the founders retained control of the business.
OzForex was founded in 1998 by Matthew Gilmour in Sydney, Australia ‘‘as an experiment’’ while working as the head of foreign exchange at Bankers Trust with the simple goal of utilising innovative technology and superb service to offer customers the best foreign exchange rates and experience on the web. The company’s customer base includes small and medium-sized businesses that import and export goods, those moving location and transferring financial assets overseas, expatriates repatriating funds, and individuals investing overseas. OzForex provides “white label” services to, for example, ING Direct and Macquarie Bank, allowing them to offer global currency buying under their own brands but powered by its platform. Major competitors include banks and eBay company, PayPal, which provided ways to buy goods and services in foreign currencies.
During recent years, the OzForex Group has expanded from its Asia-Pacific base, where it operates OzForex (www.ozforex.com.au) and NZForex (www.nzforex.co.nz). It established the UKForex (www.ukforex.co.uk) and CanadianForex (www.canadianforex.ca) brands to service a growing European and North American customer base.
In addition to these country brands, OzForex recently launched a new money transfer site, ClearFX (www.clearfx.com), which will play a significant role in the foreign exchange provider’s international expansion strategy.
The company has almost 100 employees and more than 100,000 active global customers use OzForex to move funds internationally. The company will transact more than $A7 billion in 2010, making it one of the largest foreign exchange transfer businesses globally and a top online player in the Asia-Pacific region.
According to OzForex CEO Neil Helm: “OzForex was built to offer customers a simple value proposition: a cheaper, faster, better foreign exchange experience. The fact that nearly all of our customers use us on a repeat basis, and refer us to family and friends is a testament to our focus on delivering the best service in the industry.”
Central to OzForex’s customer experience is its unique, “high-tech, high-touch” model. The company provides customers the ability to transact 24 hours, five days a week online at competitive rates. Further, OzForex provides live customer service support around the clock with trained FX dealers, who assist customers with transaction questions.
Ryan Sweeney, a Partner at Accel Partners, said his firm identified OzForex as an attractive investment opportunity due to the company’s unique, online model: “As more consumers and businesses transact internationally, hedging and purchasing foreign currency is an increasingly necessary exercise. Also, customers are progressively gaining comfort with online financial services providers. OzForex has effectively capitalised on both of these trends by providing the best online service that we have seen in the market.”
According to SmartCompany Magazine, Sweeney was attracted to OzForex due to its global scope, (it has offices in Canada and Britain), and its well-developed software for trading. “Accel is becoming much more global in nature now. And as a result of us having a global presence we need to look at opportunities in core geographies,” he says. “On a very macro level, we think people are becoming more comfortable transacting online and we think that is going to continue to grow.”
“Australia has a very good economy, and we’re seeing lots of interesting growth types and opportunities. There’s a very good entrepreneurial spirit in Australia, and we want to see them build world-wide leading businesses. People need to have a worldly perspective, which is what OzForex has.”
“From the limited view that I have, I think we’ve seen about 10-15 companies that I think are really interesting. I think there is a really good sense of things over there and they are very bullish. The entrepreneurial spirit seems to be alive.”
P. Olivier Sarkozy, Managing Director and head of Carlyle’s Global Financial Services Group said: “As the global marketplace becomes more interconnected we see FX flows continuing to increase at rapid rates. OzForex presents customers with a compelling, secure value proposition for moving funds from country to country – a huge, underserved market. OzForex has built an innovative, secure and cost-effective FX platform that is poised for significant growth.”
A Compelling Partnership for Future Growth
The OzForex management team and existing shareholder, Macquarie Private Wealth, believe the ongoing growth of OzForex will be facilitated by the global technology and financial services experience of Accel Partners and The Carlyle Group.
Head of Macquarie Private Wealth and member of the OzForex Board of Directors, Eric Schimpf, said: “OzForex is an outstanding business with an outstanding growth profile. Our initial investment in the company in 2007 was driven by its great potential for further expansion and we have seen this come to fruition during the past three years. We have been working closely with the OzForex management team to identify what is needed to accelerate and maximise this growth momentum. We believe Accel Partners and The Carlyle Group are perfect partners for us with depth of experience in successfully building online and financial services companies. We are delighted they have joined us as shareholders and look forward to working with them to continue to grow the business.”
OzForex CEO Neil Helm added: “Macquarie has been a strong and experienced shareholder and our success in working alongside them during the past three years is evident. Bringing Accel Partners and The Carlyle Group into the fold will enable us to look into new markets for growth opportunities, make smarter use of technology through leveraging their experience elsewhere in the world, and pursue acquisition opportunities.”
About Accel Partners
Founded in 1983, Accel Partners is a venture capital and growth equity firm dedicated to partnering with outstanding entrepreneurs to build world-class businesses. Accel invests globally with offices in Palo Alto, London, New Delhi, and Bangalore as well as in China via the IDG-Accel Partnership. With over $6bn under management, Accel has helped entrepreneurs build over 300 successful companies, including AdMob, Atlassian, Brightcove, ComScore, Etsy, Facebook, Gameforge, Groupon, Kayak, Macromedia, metroPCS, QlikTech, Real Networks, Riverbed, Squarespace, Veritas, Webroot, and XenSource.
About The Carlyle Group
The Carlyle Group is a global alternative asset manager with $97.7 billion of assets under management committed to 78 funds as of September 30, 2010. Carlyle invests across three asset classes – private equity, real estate and credit alternatives – in Africa, Asia, Australia, Europe, North America and South America focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services and telecommunications & media. Since 1987, the firm has invested $64.7 billion of equity in 1015 transactions. The Carlyle Group employs more than 900 people in 19 countries. In the aggregate, Carlyle portfolio companies have more than $84 billion in revenue and employ more than 398,000 people around the world. Web: www.carlyle.com; Case Studies: www.carlylegroupcreatesvalue.com; Video: www.youtube.com/OneCarlyle
Macquarie Private Wealth
Macquarie Private Wealth offers a broad range of financial advice services, investment opportunities and financial solutions to personal investors. Established in Australia in 2000, Macquarie Private Wealth manages relationships with more than 195,000 clients across Australia and New Zealand. Macquarie Private Wealth provides its clients with financial advice and expertise to help create, grow and protect their wealth. It provides advice on and access to a full range of financial solutions and structures including full service stockbroking, strategic wealth management, superannuation, cash management, portfolio management and private banking.
OzForex was established in Sydney in 1998 and operates in Sydney, Toronto and London. It deals in more than 50 currencies and serves around 100,000 transacting customers in more than 40 countries around the world. OzForex deals in electronic funds transfer for businesses and individuals who need to transfer funds from one country to another. The OzForex Group includes OzForex, UKForex, CanadianForex, NZForex, Tranzfers and ClearFX.