US Venture Fund Accel Buys into OzForex

US Venture Fund, Accel Partners have bought an investment into the OzForex business, an online foreign exchange service. OzForex is majority owned by Macquarie Private Wealth, which bought a majority share in 2007 and is a subsidiary of (ASX:MQG). The OzForex Group, which operates as OzForex, UKForex, Canadian Forex and NZForex. Accel would not reveal the size of its investment, but rumours place the transaction as between $70-110 million.

OzForex was founded in 1998 by Matthew Gilmour allows people to buy up to 50 foreign currencies to speed overseas transactions, although it did not permit trading. The latest joint round with Carlyle Group closed last Friday, the same day accounting firm Deloitte listed OzForex among Australia's 50 fastest-growing companies.

"We are really excited by this because we think Accel has a set of complementary skills with Carlyle Group," Neil Helm, OzForex's chief executive officer,said. "And when you combine that with Macquarie it creates a board with global reach in technology and financial services and that's a potent blend of skills on the board to drive the growth."

OzForex provided "white label" services for the likes of ING Direct and Macquarie that allowed them to offer global currency buying under their own brands but powered by its platform. Major competitors included banks and eBay company, PayPal, which provided ways to buy goods and services in foreign currencies. Other competitors include: Forex.com and eToro.com have opened Sydney offices this year.

"We decided a year to 18 months ago that the [foreign exchange] space was a category we wanted to take a look at and ... saw a lot of trading companies that we didn't like - trading was too risky from an investment standpoint," Accel partner Ryan Sweeney said. "You look at the other companies operating in the space around the globe there aren't many others operating [mostly] online. We believe [OzForex's is] a more scalable platform - there's 10 years of development technology behind it - and a very deep risk management system and we believe that online financial services will pick up and build acceptance around the world and these guys are set to capitalise on this trend."