Third fintech exit for Edison in 2020; demand continues for institutional fintech among strategic acquirers, with heightened volatility across trading, wealth, and capital markets
PRINCETON, N.J. (April 16, 2020)—Edison Partners, a growth-equity investment firm, has completed the exit of Clearpool Group, a New York-based provider of holistic electronic trading solutions and an independent agency broker-dealer, to BMO Financial Group (NYSE,TSX: BMO). This is the second portfolio company exit between Edison Partners and Clearpool CEO Joe Wald. Edison has over 120 exits in its 34-year history. Terms of the transaction were not disclosed.
The acquisition of Clearpool delivers powerful new capabilities to BMO's electronic trading platform as the nature of equity trading continues to move online. Clearpool will remain a separate brand under BMO Financial Group and a separate broker-dealer, with information barriers to secure clients' confidential information. The deal is Edison Partner’s third institutional fintech exit to a strategic buyer this year, which also includes Scivantage to Refinitiv and Solovis to Nasdaq.
“Strategic buyers are building their fintech muscle knowing they need to respond both to the challenges that smaller, nimble fintechs are bringing to the market and what is likely to be a prolonged period of increased market volatility,” said Chris Sugden, Managing Partner at Edison Partners who led the firm’s investments in Clearpool and also served on the company’s board. “Joe Wald has been one of our most successful, repeat CEOs. With Clearpool, he and his team built a sound, high growth, profitable business with strong unit economics and ROI. They helped to modernize electronic trading to give investors and traders greater transparency and control.”
Clearpool is the third Edison-backed fintech business led by Clearpool CEO Joe Wald, who was CEO and co-founder of EdgeTrade (4X Edison return in 2008) and, subsequently, served as executive vice president at GAIN Capital, (NYSE: GCAP) (17X Edison return in 2014). “This is my third time partnering with Chris Sudgen and the Edison team. Each time they have provided tremendous resources and expertise to help us scale our business to a successful exit,” said Clearpool CEO Joe Wald. “Chris is a hands-on board member and contributor. His operating experience, industry knowledge, and network have been invaluable to us in our journey. We are excited to have delivered a great outcome for all Clearpool shareholders and look forward to our next chapter with BMO.”
“While unicorn hunting and momentum investing get fanfare, Clearpool is the type of business Edison really appreciates—capital efficient with a focus on value creation versus vanity metrics. Even in the current market conditions, the company is our third exit in 2020 to blue-chip acquirers including Refinitiv, Nasdaq and now BMO. Our strategy continues to deliver consistently great returns for all stakeholders,” said Sugden.
Edison Partners has financed and guided more than 235 private companies, including more than 46 fintech companies. The firm was recognized for two years in a row as Fintech Equity Investor of the Year by LendIt Fintech and named to the Institutional Investor's Fintech Finance 40 power ranking.
Noteworthy fintech exits include Billtrust, EdgeTrade, FolioDynamix, GAIN Capital, Liberty Tax, Scivantage, Solovis and Princeton Financial. Current financial technology investments include: BFS Capital, Bento for Business, Bipsync, ComplySci, FundThatFlip, GAN Integrity, Giant Oak, MoneyLion, Predata, YieldStreet, and Zelis.
Launched in 2014 and based in New York, Clearpool Group, Inc. is the brand name for the Electronic Trading Technology Platform of BMO Financial Group, offering holistic electronic trading solutions and providing agency broker-dealer execution services. With over 100 Algorithmic Management System (AMS) broker-dealer clients and executing approximately 2% of the US equity market volume, Clearpool empowers market participants to achieve better quality executions in an evolving equity market microstructure and competitive landscape.
About Edison Partners
For more than 30 years, Edison Partners has been helping CEOs and their executive teams grow and scale successful companies. The firm's investment team brings extensive investing and operating experience to each investment. Through a unique combination of growth capital and the Edison Edge platform, consisting of operating centers of excellence, the Edison Director Network, and executive education programs, Edison employs a truly integrated approach to accelerating growth and creating value for businesses. A team of experts in enterprise solutions, financial technology, and healthcare IT sectors, Edison targets high-growth companies with $5 to $25 million in revenue; investments also include buyouts, recapitalizations, spinouts and secondary stock purchases.
Edison's active portfolio has created aggregated market value exceeding $10 billion. Edison Partners is based in Princeton, NJ and manages more than $1.4 billion in assets throughout the eastern United States.