OvalX selling Capital.com its clientele as Jump withdraws its backing

The majority of OvalX’s clientele will soon be transferred to rival broker Capital.com, which is currently led by former IG Group CEO Peter Hetherington.

OvalX CEO Luca Merolla recently held a town hall-style meeting with staff members, informing them that the company’s controlling shareholder, US venture capital firm Jump Capital, had decided to stop funding the parent company, which was losing money, and that the management team was “looking at options,” which would probably result in the winding-down of OvalX.

At this point, it would certainly benefit from a little more context and explanation.

It wasn’t totally accurate when Guru Capital SA, a company located in Switzerland and controlled by former Swissquote executives Ryan Nettles and Luca Merolla, stated in late 2020 that Guru was purchasing ETX Capital (which would later be rebranded as OvalX). Jump Capital, a US-based venture capital firm, provided the cash for the acquisition, and one of its partners, Saurabh Sharma, joined the board of Monecor (London) Limited, the acquisition’s parent company.

Jump owned and maintained complete control over Monecor. The agreement with Jump stated that while Guru had originated and “put together” the deal, Messrs. Nettles and Merolla were to oversee the operation of ETX Capital in exchange for their Guru Capital firm receiving an ownership stake if and when specific business objectives were achieved. Ultimately, OvalX’s CEO position was assumed by Luca Merolla.

The second explanation relates to the Oval Money app, which Monecor/ETX acquired in 2021 and is situated in Italy (Torino). At the time, it was advertised as a chance to purchase a potential savings software that was well-liked by youthful users and incorporate it into the “older” ETX offering. Although we would assume that anything has potential, Oval Money’s assets were actually purchased by Monecor/ETX for a price of roughly $1.5 million.

It’s interesting to note that soon after the acquisition, the corporation opted to rebrand the entire operation as OvalX, giving significant positions within the company to former Oval employees who had driven their prior company into bankruptcy.

Whatever the intentions, the company’s financial situation has worsened to the point where Jump has made the decision to “cut bait” and stop funding the enterprise. We know that things didn’t improve in 2022 since in 2021, the first year under Guru Capital’s management, Monecor’s revenues decreased by 24% to £24.2 million from £31.8 million the year before, with a net loss of £6.9 million. (However, the company does seem to have sufficient capital after receiving capital infusions from Jump last year.)

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