A fintech play backed by a trio of City heavy hitters is apparently on the hunt for an AIM cash shell to reverse into.
Forex specialist FXPress Payment Services, which caters for small and mid-sized businesses, is looking to list in the first quarter of next year with a price tag of up to £25 million.
Joining its board are former Interserve chairman Glyn Barker; Elliott Mannis, previously the chief financial officer of Anglian Water, and corporate lawyer, Gareth Edwards.
According to those in the know, the company is close to concluding a £1.2 million pre-IPO funding round that will be used to accelerate growth.
In November, FXPress handled £115mln in foreign exchange transactions, up strongly from six months ago when the business handled around a quarter of that figure.
The company generated revenues from currency trading of £1.15mln in the last quarter, which gives an annual run rate of £4.6mln.
FXPress has grown using a cloud-based technology that will allow it to roll up other businesses onto the platform. It is thought to be interested in acquiring 10-15 smaller firms, called client aggregators, that funnel business its way.
There may be other, more material opportunities to buy established forex firms pre-IPO, sources said, while joint ventures may offer opportunities to bolt on other payment services.
A look at the current list of publicly-quoted forex firms shows they have grown rapidly since IPO and perhaps gives some guide to the trajectory FXPress might find itself on.
While valuations of up to 10-times last reported revenues look fairly punchy, they help underline just what a hot market forex is at the moment, particularly when there is a fintech twist.
In listing, FXPress is tapping into acquisition currency that is attractive to sellers of private businesses that currently might fetch two-times revenues in a private trade sale.
Talking about FXPress’ growth plans, one source said: “These guys have a scalable technology, a great business model and no end of opportunities to expand.”
These points probably haven’t gone unnoticed by the competition. “They have been a very well-kept secret so far, but not for long,” said another person close to the company.
“One of the big competitors has already taken a look. They [FXPress] didn’t allow the conversation to go far as the journey has just started.”