The dollar may be selling near multi-year lows on global currency markets. But among operators of foreign exchange trading sites, it’s still a welcome part of a fast-growing business.
Last week, Oanda Corp., a provider of currency trading services to individual and institutional customers, announced that it has closed a $100 million second round from venture and growth investors. The financing, led by New Enterprise Associates, will largely go toward targeting more services to large institutional investors.
NEA General Partner Krishna “Kittu” Kolluri characterized the deal as “a venture growth equity round, where the company has already proven out their business model and is looking to scale.” Oanda, which was founded in 1996 and has offices in New York, Toronto and Zurich, reportedly has earned a profit for the last few years.
The company, which did not disclose sales figures, estimates that more than 20% of the world’s online spot foreign exchange transactions take place on its servers. The company sees room for considerable expansion, too. Last week, the company said that the global foreign exchange market trades more than $2 trillion a day, with online retail trading a rapidly growing part of that market.
The company’s latest funding round was “way oversubscribed,” according to Kolluri, who took a board seat in conjunction with NEA’s investment. The final valuation came in at the high end of the expected range, he said. The company previously raised $17 million in June 2005, from Index Ventures, though Index did not participate in the latest round.
Oanda is not the only foreign exchange company to raise a large venture round this year. Gain Capital, Bedminster, N.J.-based operator of a rival for exchange platform, raised $40 million in expansion capital in a March 2006 round led by Tudor Ventures. —Joanna Glasner