Temenos deal expands market reach for Avoka
The recent acquisition of Avoka by global software business Temenos will open up new markets for the business, according to Avoka founder Philip Copeland.
“Our focus has been on the North American, European and Australian markets. We are now working with an organisation that has 60 offices around the world selling into markets such as the Middle East, Africa and Asia. We are well positioned to expand our products into these markets,” Copeland said.
Avoka general manager Will Beaumont concurred.
“Temenos is dealing with over five hundred customers across Asia. From Avoka’s perspective, we have eyed possibilities in Asia. This acquisition gives us a natural stepping stone into the region,” Beaumont said.
Avoka will continue to “stick to its knitting,” according to Copeland in terms of its product – which specializes in digital customer acquisition and onboarding.
“We will have the opportunity to add additional functionality. Our customers will also have the ability to access Temenos’ online banking range of products and market solutions,” Copeland said.
Temenos’ approach to research and development is also key, according to Beaumont.
“While we will stick to our knitting, there is a ton of work we can do in research and development. Temenos invests 20 per cent in research and development of its products, well outpacing its competitors, and well above industry average. This will give us the opportunity to further develop our products,” Beaumont said.
There are also opportunities in open banking that will further strengthen Avoka’s value propositions.
“Temenos has been a leader in the banking world particularly in Europe, building fantastic functionality around [open banking]. The fact that we are good at onboarding will only support this functionality,” Copeland said.
Founded in 2002 in Manly – in Sydney’s northern beaches, Avoka’s customer base has grown rapidly with both top tier and mid-market banks with clients in Europe, Australia and US. With over 270 employees in offices across the US, UK and Australia. The business has more than 85 customers in retail, corporate and wealth.
The Manly office will remain an important part of the business.
“The Temenos team have visited us in Manly as part of the announcement and were overwhelmingly enthusiastic with our office. Many would like to work out of our Manly office, its an important part of our culture and adds to staff retention being based in Manly. It will remain a key part of our operation,” Beaumont said.
Staffing will remain, and Copeland adds that the business continues to grow 30 to 40 per cent a year which will only support team growth.
“We continue to do the bulk of our product engineering and development in our Manly head office. Australia in fact remains a very cost-effective location in terms of product development.” Copeland said.
In terms of branding, the Avoka brand is strong, however over time will likely become the Temenos brand, in line with Temenos’s other acquisitions, Copeland adds that its products will now be supported by a larger team.
“We have been evaluating a few different options this year. At the beginning of the year we decided to engage with the Moelis Advisory Group in North America to evaluate different growth pathways for us.
“We always knew we were able to do an IPO on the ASX but we also wanted to explore different growth options,” Copeland said.
After discussions with investors including a number of leading private equity firms, Temenos quickly rose to the top in terms of a business that Avoka was interested in working with.
“It is a well-regarded business in Europe, listed and at US$8 billion market cap, it has quadrupled its market cap over the last few years. There was a complimentary aspect to our businesses as well. We had a strong digital front office solution. Temenos was looking to strengthen that part of their business. They also had been successful with their core banking system. The more we looked at it jointly, the more it made a huge amount of sense.”