Financial Services Investor J.C. Flowers & Co. Takes Stake in Institutional-Focused LMAX Group

Deal values LMAX Digital parent LMAX Group at $1 billion, and will be used for international expansion.

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David Mercer, CEO, LMAX; Blockworks exclusive art by Axel Rangel

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key takeaways

  • LMAX Group has announced an investment round with J.C. Flowers & Co, giving the investor 30% of the company for $300 million at a $1 billion valuation
  • LMAX Group CEO said that J.C. Flowers is investing in the cohesion of institutional FX trade and crypto

A few years ago LMAX Group CEO David Mercer knocked on the doors of 34 of the world’s biggest banks to try and get them onboarded to his institutional-grade digital assets trading platform LMAX Digital. Back then, they all said ‘not now, David’. Fast forward to today and LMAX Group has closed a round with one of the world’s pre-eminent financial investors valuing the company at $1 billion.

The transaction remains subject to regulatory approval.

According to a press release, J.C. Flowers & Co is set to take a 30% stake in LMAX Group for $300 million in a secondary share sale by LMAX Group employees. LMAX Group says that they will use the fundraise for a global expansion, particularly in the U.S. and Asia. In addition to a digital assets desk, LMAX Group also operates a sizable foreign exchange business.  

“J.C. Flowers invested in the business model. The vision we share is that LMAX Group becomes the preeminent player in global capital markets and the market leader of FX and cryptocurrency trading,” Mercer told Blockworks in an interview. “With our technology, we can leverage any asset class in the world. We took it and applied it to crypto right alongside foreign exchange”.

Mercer is quick to point out that LMAX Digital, the crypto desk, with its small group of institutional traders, is second only to Coinbase in volume. Coinbase reports 6.1 million monthly transacting users.

“LMAX Group is an exciting and well-respected company with a leading position in a market with great potential, making it a highly compelling opportunity for our Firm,” Chris Flowers, Managing Director and CEO, J.C. Flowers & Co, said in a release. “The LMAX Group exchange infrastructure offers efficiency and transparency, both of which are in high demand by the growing numbers of institutional  participants in foreign exchange and cryptocurrency trading.”

40% of LMAX Digital clients also trade another asset class, Mercer notes, and he said that the company is planning to use the fundraise to further the cohesion of FX and digital assets. 

One cohesion of the asset classes will be the expansion of LMAX Group’s FX trading hours to match crypto’s. Before, the company listed its FX products 24 hours a day, 5 days a week. But, it will be expanding them to match crypto’s 24/7/365 market. 

“That’s the future. People want to trade 24 hours a day, 7 days a week. We believe LMAX Group will lead the way in this new era of capital markets,” Mercer said. “Otherwise this great technology will just sit in a data center, collecting dust.”

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