FTV Capital invested $30 million in Edgewater Markets LLC, a foreign exchange aggregator and distributor.
Edgewater provides electronic foreign exchange tools and services to institutional clients, including banks, hedge funds and pension funds.
Brad Bernstein, a partner at FTV, said Edgewater would look to enhance existing technology, add new employees and expand to new markets with FTV’s investment. Edgewater, of New York, has additional offices in London, Chicago, Los Angeles, Mexico City and Singapore.
Mr. Bernstein said the company is likely to consider expansion in South America, Asia and the Middle East.
Alex Scarsini, a co-founder and president at Edgewater, sees the company, which was founded in 2009, as an alternative to traditional investment banks and other sources of foreign exchange liquidity.
“We didn’t know it at the time, but we developed a business model that has been widely accepted as a great alternative and more in line with today’s environment,” Mr. Scarsini said. “There’s been quite a bit of erosion on the part of banks, and they’ve been a little reluctant to make these products fully electronic.”
FTV reached out to Edgewater proactively about investing in the company, said Mr. Bernstein, adding the company was considering hiring a banker and running a process. However, he said, when the two parties met they had a “love affair.”
“It’s a bootstrapped business, growing rapidly, profitably and run by two guys with a lot of experience in the industry,” said Mr. Bernstein.
The deal marks FTV’s third new investment this quarter. The firm in February invested $76 million in the VPay unit of payment services company StoneEagle Services. Earlier in the quarter, FTV invested 150 million British pounds in financial services and technology company True Potential LLP, based in Newcastle upon Tyne, England.
San Francisco firm FTV has raised more than $1.8 billion to date to invest in companies within three core sectors: enterprise technology and services; financial services; and payments and transaction processing. The firm invests in companies with revenue of $10 million to $100 million.
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