Fenergo confirms sale of majority stake; looks to become $5bn business

Irish fintech Fenergo has the potential to become a $5 billion (€4.1 billion) company, its chief executive Marc Murphy has said as the company confirmed that two private equity firms have bought a majority stake in the business.

No financial details of the deal have been publicly disclosed but as The Irish Times reported in late April, the company acquired unicorn status as a result of the deal, meaning it is now valued at over $1billion.

French private equity group Astorg joined with London-based Bridgepoint to buy out stakes previously owned by Insight Venture Partners and DXC in a deal valued by industry sources at $600 million. This give Fenergo a market valuation of $1.165 billion.

Confirming the deal, which is subject to regulatory approval, Mr Murphy said it would enable Fenergo to become a major player globally.

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“We now have a platform to really scale and become a truly global enterprise business. There is going to be a large multimillion euro sum of money available for us to grow fast by aggressively acquiring businesses to complement what we do, which is something we haven’t done to date,” he said.

Compliance

“Our new backers believe we can become a much bigger business and they want us to build a $5 billion company, rather than a $1 billion one so we’ll be growing the company significantly over the coming years,” Mr Murphy said.

Fenergo works with 300 of the largest banks and insurers in the world, including ABN Amro, Aviva, Bank of China, Danske Bank, Credit Suisse, UBS, Santander and State Street.

Founded in 2008, it develops software for financial institutions that helps them with issues such as regulatory compliance and managing client data. In recent years it has also expanded into new sectors such as asset and wealth management.

It currently employs about 1,000 people with Mr Murphy predicting headcount will increase dramatically in the future.

In the financial year ending March 2021, Fenergo’s revenue increased by 17 per cent to $107 million.

"Continued pressure on financial institutions to improve their compliance work, while at the same time managing margins and increased regulation, has created the need for integrated digital solutions that enable reduced operating costs, improve capital allocation and comply with regulations," said David Nicault, a partner at Bridgepoint.

“We are looking forward to working closely with the management team at Fenergo as they build on the company’s success to date and realise its full growth potential,” he added.