OZFOREX, the online foreign-exchange services specialist backed by Macquarie Group and two of the world's most powerful venture capital and private equity investors, is planning to double the size of its business over the next four years, underpinned by a major expansion into the US and Asia.
OzForex, which is bankrolled by heavyweight investors Accel Partners and the Carlyle Group, has also signed a global partnership with Travelex that it plans to roll out in Australia and New Zealand next year to provide a Travelex-branded online service allowing consumers to make account-to-account foreign exchange payments.
Simon Griffin, the group's head of southern hemisphere, said it had also opened an office in Hong Kong and was in the process of securing a licence in Singapore, but the US was its prime focus for offshore growth in the year ahead.
"We have a good opportunity to take some substantial market share. We will have 10 to 12 staff in the US by the end of the financial year," Mr Griffin told The Australian. The group opened an office in San Francisco in May for its new US subsidiary, USForex.
The group expects to generate annual revenues of about $50m in revenues for the year to March 31. Mr Helm said year-to-date revenues were about 20-25 per cent up on the prior year, and added that "from a profit perspective, we should be up by the same magnitude for the year".
OzForex, which completes more than 300,000 funds transfers each year on behalf of clients across the globe, recorded a net profit of $13.1m in the year to March 31 this year.
The group, which was founded by Matt Gilmore and Gary Lord in 1998, has ramped up its operations in the past five years after Macquarie bought 51 per cent of the business and Mr Helm, a former Macquarie executive, joined as chief executive.
In November 2010, Accel and Carlyle bought minority stakes and Macquarie reduced its stake. Now Macquarie, Carlyle, Accel and the two founders own equal stakes in the business.
The deal with Accel and Carlyle provided $70m to underpin expansion and growth opportunities in the US.
"At Accel we see the financial services world moving both more online and mobile every day as consumers and businesses demand financial products that are as intuitive and efficient as transacting with their favourite online retailers and mobile apps," said Ryan Sweeney, general partner at Accel Partners.
While there was speculation earlier this year that the group was contemplating a public float, Mr Helm said it was not currently on the agenda.
"There is no plan at this point to do an IPO," he said. "It is not on the board's agenda.
"The focus is on growth and to ensure the business is still innovative. It is not the right time considering the current market volatility. There is no reason to do it at this point."
OzForex's key growth engine is its so-called White Label strategy, where it works with other institutions to provide their customer service. That model will underpin its growth in the US.
It already runs consumer foreign exchange platforms for ING Direct Australia, Macquarie Private Wealth and, most recently, Travelex. The Travelex deal, signed in late October and brought to the group by Carlyle, allows consumers to make international foreign payments and money transfers through the OzForex online payments platform.
"We believe we have the best technical platform to support foreign exchange," Mr Griffin said. "The combination of their brand and our platform is very powerful."
The group has been criticised for charging hefty margins compared with most prime brokers. But Mr Helm stressed that OzForex was not simply a foreign exchange broker. He said that, while its average margin was 40 basis points, this compared favourably with some of the banks and other providers.
