United Fintech closes its third acquisition, buys FairXchange stake
United Fintech, a London-based start-up looking to buy a slate of capital markets fintechs, has acquired a minority stake in data science and execution performance analytics specialist, FairXchange.
United Fintech has taken a 25% stake in FairXchange for an undisclosed amount, with the intention of fully acquiring the firm over the next few years through a multi-stage takeover.
FairXchange was founded in 2016 by Guy Hopkins, a former Bloomberg veteran and head of FX at Morgan Stanley. The data science firm specializes in microstructural analysis of financial markets and brings to participants better transparency around execution performance.
FairXchange, which has no affiliation with any liquidity providers or trading venues, is already being used by an extensive client base including a number of global financial institutions. Most recently, it has been selected by Deutsche Börse’s 360TGTX and 24 Exchange for independent execution analytics.
FairXchange’s analytical product, Horizon, analyzes all relevant transaction and pricing data and helps facilitate mutually profitable data-driven discussions with its liquidity providers and liquidity consumers.
Horizon also provides metrics that help users analyze the different events associated with FX trading alongside the actual fills. It takes a large data-set of any trading event that can be captured electronically and compares it to market data at the time.
“The City and Wall Street will see bigger disruption in the next 10 years than they have seen in the past 100 years. As United Fintech will onboard the Company’s clients and FairXchange will get an opportunity to grow within our clientele, this is a mutual win for both parties – and a milestone for United Fintech, completing its third transaction in just one year,” says Christian Frahm.
The Danish CEO also noted that the acquisition won’t impact everyday business for FairXchange’s clients or employees, adding that ahead of the transaction, United Fintech showed Horizon to six major global banks, aligning it with their product roadmaps.
”From the first conversation, we knew United Fintech was the perfect fit; a compelling vision, an innovative business model and a very impressive management team with deep expertise in financial markets. We’re looking forward to joining the United Fintech platform, increasing our own reach while also contributing to the wider success of the group,” says Guy Hopkins, who will continue to lead FairXchange as the designated Trading Analytics product on United Fintech’s platform. Hopkins’ initial remit is to incorporate FairXchange’s business within United Fintech’s broader strategy.
United Fintech is the brainchild of Christian Frahm, founder of Copenhagen-based global holding company CFH Group. Frahm, who launched the City startup in November 2020, also worked for a time at both Bloomberg and Saxo Bank.
The startup promises to enable banks and financial institutions to access new technology and accelerate their transition to a digital world. Over the next five years, United Fintech plans to acquire and scale “a number” of “small to medium-sized engineering-led fintechs”.
It mentions areas of interest, including trading platforms, liquidity management and regulatory reporting tools, Big Data tools, institutional blockchain, bots and virtual assistants.
These acquisitions will then provide banks and financial institutions with “one-stop-shop” and “easy access” to capital market data and technology, as part of their larger digital transformations.
The company’s first acquisition was NetDania, a Danish fintech company, which has been providing data solutions to financial services firms and individual traders for over two decades.