TradeFloor buys OpenMarkets, broking revenue doubles

Software developer TradeFloor has acquired a controlling stake in OpenMarkets, after spending five months inside the retail stockbroker stripping out costs and updating its technology. Over this time, OpenMarkets’ revenue has doubled and it has become profitable.

TradeFloor, whose derivatives risk management software is used by brokers such as Morgans and Shaw to manage capital and margin limits, entered into a strategic partnership with OpenMarkets in December. The two then began work on a process of transformation as a precursor to the deal.

OpenMarkets, founded in 2013, is one of the largest, independent retail brokers by volume with almost 60,000 clients. But with intense competition in the industry pressuring margins, OpenMarkets needed an overhaul on costs and technology.

TradeFloor slashed expenses by installing its own technology stack for order management and processing, and reducing the need for various external vendors. It also chopped salaries and the number of senior managers, further reducing the unit cost of trades.

OpenMarkets has doubled revenue since December, hitting $1 million in March. TradeFloor, which has been funded by its two founders since making profits from its first year of operation in 2014, purchased half of OpenMarkets for $25 million in April.

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Source: TradeFloor buys OpenMarkets, broking revenue doubles