Astorg Partners, a French private equity company, and Bridgepoint, an alternative asset fund management company, have announced the acquisition of the Irish fintech company Fenergo Group.
The investment companies have joined the growing list of financial firms that have been investing in the hot fintech space over the last couple of years as the fintech industry has been witnessing exponential growth during this period. The fintech company Finrego has developed a SaaS platform for know your customer and client life cycle management solutions and has been growing strongly due to the recent wave towards digitalization.
It counts Mizuho, Santander, and BNP Paribas as its clients and in the last fiscal year that ended on March 31, it showed an impressive 17% growth in its revenues to $107 million which would have caught the eyes of the investors. The company was founded in 2009 and the recent acquisition has happened by buying out the shares of its founder, Marc Murphy, and a private equity company Insight Partners that had invested into the company in 2015.
“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,” explained Bridgepoint’s partner in charge of technology investment activity David Nicault in a statement.
While there have been some big growth in the fintech segment, one of the aspects that the companies seem to be struggling with, is their relationship with the regulators in each region and falling in line with compliance in those. This has been a pretty tough task as it places a lot of cost on the company and also in many regions, it hinders innovation as the regulation are unable to keep pace with the fast developments that happen in the industry. Also, the companies struggle with the different compliance procedures in different regions and this places a lot of pressure on their growth.
This is the reason why compliance and regulatory companies that help other firms be in line with the regulations as they expand to new regions are always in demand. This helps the fintech companies to focus on their growth and leave the regulatory headache to the third-party companies that are experts in this field and hence save a lot of time and money as well. It is for this reason why the products from Finergo have been in demand over the last couple of years and Astorg and Bridgepoint would believe that this would be the case going forward as well.