A British-based fintech startup aiming to take on the globe’s biggest banks in the £2 trillion currency exchange market has raised 30 million dollars (£22 million) in a fundraising round.
Milltech FX is now worth more than 100 million dollars (£72.7 million), with the new funding coming from a private equity firm after bosses there believed they were paying too much in exchange fees.
Private equity firm VCM Global Asset Management now has a 25% stake and bosses say they hope the deal will allow them to offer more services that undercut current fees charged to institutional investors in the FX market.
VCM chief executive, Tom Vukota, said: “When we came across MillTech FX … we were so surprised by it that we thought hang on here, this is big, this company is going to challenge the status quo and disrupt the market, we should invest.”
MillTech FX is backed by Sir Ronald Cohen, known as the “godfather of venture capitalism”, founding Apax Partners in the 1970s and co-founding the Portland Trust. He has also taken up roles advising previous governments and financially backed Gordon Brown.
He later persuaded George Osborne as chancellor to offer tax breaks for investments in “social capital”.
MillTech FX claim they can cut currency-exchange operations costs by between 50% and 95% using the clout of its parent company, specialist currency manager Millennium Global.
Santiago Tello, managing director at VCM and board member of MillTech FX, said: “The sad reality is that the global FX market lacks transparency, is riddled with hidden charges and can cost companies millions of dollars annually if they are trading significant volumes.
“Only the largest and most sophisticated institutions typically benefit from direct access to low-cost rates and enjoy relationships with multiple banks. For the rest of the planet, the truth is that millions of companies are paying excessively worldwide.”