42Markets

42Markets Group is a specialist fintech group that incubates, invests in and builds companies operating in financial and capital markets infrastructure. The group's stated aim is to make global financial and capital markets simpler, smarter and more accessible, and to build shareholder value by identifying scalable opportunities in specialist market categories and backing them with both capital and operating expertise. It positions itself as technology-driven, targeting the underlying mechanics of capital markets systems rather than narrow retail-investor verticals or conventional impact investing.

The portfolio comprises four named businesses. Andile supplies banks, central banks and other financial institutions with trade and treasury platform-related services and solutions, drawing on relationships with global platform providers. Mesh is a multi-sided, end-to-end, cross-asset global platform intended to compress and streamline services traditionally provided by financial and capital markets gatekeepers; it is built on distributed ledger and financial markets infrastructure technology and is led by co-founder and Managing Director Connie Bloem, with Andries Brink as co-founder. FX Flow is a foreign currency risk management system giving clients a real-time view of foreign currency exposure and hedges, and allowing risk managers to manage open hedges and track performance. FinMio provides banks and insurers with infrastructure and operational support for real-time digital products and channels and for managing operational risk in line with regulatory requirements.

Coverage of the group's 2023 investment describes its focus areas as decentralised finance, regtech and fintech, and its ambition as improving the efficiency of capital markets in Africa — reducing friction and cost in second-tier capital markets, improving transparency and real-time risk management, and connecting central banks and other large asset generators to corporate and retail investors.

Founding story

The group was founded by Andries Brink, a computer scientist with over 24 years of experience in fintech who serves as founder and Group CEO. 42Markets says it was established on the principle of exponential growth, deriving its name from Moore's Law: doubling every two periods implies a growth rate of roughly 42% per period (1.42² = 2), and the group states it measures subsidiaries on whether they can double regularly, repeatably and predictably.

Business model

42Markets operates as an incubator and holding group: it founds, invests in and incubates specialist financial and capital markets companies, contributing capital and expertise and using the group's reach and industry credibility to take their propositions to market. Group functions including technology strategy, product development, IT infrastructure and finance are provided centrally across subsidiaries.

Value is generated through ownership stakes in subsidiary operating companies, which sell platforms, systems and technology-driven services to financial institutions.

Traction

Convergence Partners cited a long track record of consistent double-digit growth across the group's companies when announcing its investment. Mesh is characterised by the group as a potential unicorn business, and the 2023 capital injection was intended to fund product buildout and further geographic expansion.

Latest developments

In April 2023 Convergence Partners announced the acquisition of a strategic stake in 42Markets Group, providing $10 million in growth funding through the $296 million Convergence Partners Digital Infrastructure Fund to accelerate product development and geographic expansion across the portfolio.