Irish fintech firm Fenergo dips into the red as turnover rises

Irish technology firm Fenergo, which last year secured a $75 million (€67 million) investment led by US equity firm Insight Venture Partners, slipped into the red during the 12 months ending March 2016.

The company, which provides software solutions for investment, private and corporate banks, recorded a €2.83 million pretax loss compared to a €1.47 million profit a year earlier.

Fenergo, which was founded in 2009 by chief executive Marc Murphy as a spin-off from John Purdy's IT outsourcing business Ergo, reported turnover of €18.7 million as against €12.5 million in the prior year.

The group had a surplus in shareholders’ funds at year end of €12 million, versus €1.3 million in the prior year.

“The directors believe, based on current forecasts and projections, that it will meet its targets for 2017 and continue to trade in a range of modest profits or losses,” the company said.

US revenues

A breakdown of full-year turnover shows that over €8 million in revenues came from the US with almost €4 million derived from the UK. More than €16 million in turnover was from services with a further €1.3 million coming from support and maintenance.

Fenergo specialises in helping financial institutions to meet regulatory compliance and data requirements when taking on new clients. Headquartered in Dublin, it has offices in London, New York, Boston, Sydney, Singapore, Tokyo and Abu Dhabi.

The firm’s client list includes BNY Mellon, HSBC, State Street, Royal Bank of Scotland (RBS) and BBVA.

The company secured $75 million in funding from Insight Venture Partners and Aquiline Capital Partners last August in a deal that valued the firm at €110 million. Insight was an early investor in the likes of Twitter, Flipboard, Tumblr and Hootsuite. Financial services-focused Aquiline's investments include HedgeServ, which employs more than 400 people in Ireland.

Second round

This was the second fundraising effort for the company. In 2013, Fenergo secured €4 million in funding from Investec Ventures Ireland.

Fenergo’s accounts indicate that as well as acquiring a majority stake in the company, Insight and Aquiline invested a further €9.5 million in the firm, with the additional capital to be used to aid the company’s expansion.

The company last year said it was intending to float within three years time as it targets turnover of €100 million by 2018.

Fenergo, which announced plans to boost employee numbers by about 100 following last year’s investment, employed 122 staff at the end of March 2016, compared to 74 for the same period in 2015. Staff costs totalled €10.1 million as against €5.7 million a year earlier.