FLX Networks, a venture capital-backed engagement and sales technology platform linking asset managers with wealth managers, is shopping for a buyside advisor, said founder and CEO Brian Moran.
The Bernardsville, New Jersey-based company plans opportunistic buys for investment management technology or service companies that could add to revenue or talent and is seeking an advisor with “nuts-and-bolts” expertise on M&A transaction structure and logistics, Moran said.
FLX offers a subscription service for data available to its membership, which has surpassed 1,000, he said. The firm also derives revenue from sales on its solutions exchange where asset management members on one side and wealth managers and advisor members on the other leverage business services and products to improve strategies and execution, Moran said.
The company has built a pipeline of businesses looking to join and believes there are financial technology companies that operate in silos that could benefit from being part of a more comprehensive platform while adding long-term value to their enterprises through FLX, he said.
The firm is willing to make acquihires for talent that could help with its technology, Moran said. FLX could also acquire companies if FLX becomes a significant portion of their revenues and they offer a service especially in demand to members, Moran said.
That demand was behind FLX’s decision to acquire Focus Partners, a New Jersey-based firm that coaches and consults financial advisors, wealth management firms and asset managers, the CEO said.
“The No. 1 or 2 thing that every member was telling us was they wanted more support around practice management and coaching,” Moran said. Focus Partners is FLX Network’s first acquisition, he said.
FLX has a pipeline of potential targets with whom it is engaged and reviews potential buys regularly, he said. Size possibilities range from bolt-on deals to a merger with a similar-sized company if the fit is right, Moran said.
The platform has facilitated more than USD 1bn worth of investment product sales and saved member asset managers an estimated USD 10m in discretionary costs, Moran said.
FLX raised USD 10m in an investment round announced in November 2022 from Barings, Allianz Life Ventures and Broadridge that valued it at USD 50m. The raise brought its total raised to about USD 15.1m, Moran said. It will look to raise another round within 12 months, he said.
The company has brought in more revenue than equity since its founding in December 2019, Moran said. It grew annual recurring revenue about 83% in 2022 and is on track to grow 55% in 2023, the CEO said, without providing a figure.
For its next round, FLX would like a strategic partner who appreciates its commercial potential and the significant addressable market, said Moran. FLX has not yet determined how much to raise.
The company would also favor financial backers who can bring additional adoption or participants’ experience for its platform partners and membership, he said.
FLX will use the proceeds to further ramp up talent and engineering architecture to develop and release membership services faster, Moran said. The firm will also bolster marketing and sales as well as operational infrastructure such as invoicing, billing and HR, he said.
Moran, who is majority owner, would not rule out the possibility of a majority investor but said that is unlikely.
FLX has just under 50 employees and plans to announce key executive hires in the coming months, he said.
Pillsbury Winthrop Shaw Pittman provides legal services. Todd & Todd and PKF O’Connor Davies provide accounting services.
