Fintech start-up Assure Hedge raises €5m in fresh funds

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The start-up said it doubled clients for its foreign exchange hedging platform in 2020 and plans to raise a Series A round later this year.

Irish fintech start-up Assure Hedge has raised €5m in a new tranche of funding for its foreign exchange hedging product.

The investment values the business at €30m, though no investor names were disclosed. The company, which raised €1.6m back in 2019, said it has appointed Davy as an adviser to its Series A fundraising that will open later this year.

Assure Hedge develops a software platform to help businesses manage their foreign currency exchange exposure.

According to the company, it doubled its client base in 2020 – and expects similar growth in 2021 – and added 15 new employees.

Chief executive Barry McCarthy, a former financial derivatives trader, said the latest cash injection will give the company the “flexibility” it needs ahead of raising further funds from institutional investors in its Series A round.

“Given the response we have had to date, we are confident that we are still only scratching the surface of demand from SMEs looking for an easy way to manage foreign exchange exposure,” he said.

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“Whether it is coping with the volatility in sterling caused by Brexit, or handling the rollercoaster ride of the dollar through quantitative easing, our mission is to ensure that the ability to hedge foreign exchange risk at low cost is no longer the preserve of big corporates.”

More than $5trn in foreign exchange revenues is traded globally every day, on average. Assure Hedge targets SMEs with its platform to address a market where businesses may not be hedging their currency exposure nearly as much as larger companies.

Citing recent research from East & Partners, Assure Hedge said only 50pc of SMEs hedge their foreign exchange risk, with many businesses saying it is too complex and costly. SMEs operating in different currencies could be losing revenue through swings in currency values.

Over the last two years, the company has secured regulatory approvals under the EU’s Markets in Financial Instruments Directive (MiFID) and the Payment Services Directive (PSD) in order to provide a more robust service to SMEs.

Assure Hedge launched its latest product EZFX Broker last year, which provides FX hedging quotations to SMEs. It is preparing a new product for launch next month that will expand the range of brokers and financial intermediaries that it works with.

The start-up is headquartered in Dublin with offices in London and Portugal.