Wamid Buys 51% Stake In DirectFN
Saudi Tadawul Group’s technology and digital transformation arm, Wamid, has acquired a 51% stake in Direct Financial Network Company (DirectFN). The deal went through via a sale and purchase agreement between Wamid and National 2 Ventures (N2V).
The innovation-focused company shelled out a total of $35.7 million to acquire DirectFN.
The Beginning of a Symbiotic Relationship
Both Wamid and DirectFN will benefit from this agreement. The parent company of Wamid- the Saudi Tadawul Group, was created with the specific aim of upgrading the infrastructure of Saudi Arabia’s stock exchange – the Saudi Exchange. In fact, the Tadawul Group is a holding company on the stock exchange. It is formed by four entities – of which Wamid is a part. Although Wamid has been advertising its co-location service quite vocally, the company’s ultimate aim is to support the capital market infrastructure in Saudi Arabia and, ultimately, across the whole MENA region.
The 51% acquisition of DirectFN by Wamid should therefore be seen in the context stated above. This acquisition will help the company immensely, as DirectFN already has a robust portfolio of products catering to stakeholders involved in the capital market. The latter has three major technology offerings-
● DirectFN FinTECH
● DirectFN FinCON
● DirectFN FinREG
The FinTECH division of DirectFN offers a comprehensive frontend and backend infrastructure development solution for companies involved in the capital market sector. From developing brokerage management systems to order management and execution setup along with CRM and wealth management solutions- the division is known for its skillful deployment of stock trading and investment infrastructure and wealth management backend.
The FinCON division brings data analytics to investing and trading. It has expertise in building a real-time market data-checking system with the provision for setting up conditional watchlists and analytical dashboards and charts.
The FinREG division enables capital market entities to adhere to strict compliance measures. From developing anti-money laundering mechanisms to building post-trade reconciliation systems, this division enables organizations to audit their processes and remain compliant.
Wamid’s acquisition of DirectFN is thus a step forward towards a more robust capital market infrastructure in Saudi Arabia and beyond. The international reach of DirectFN will further bolster the growth of the Saudi Exchange and the Tadawul Group.
DirectFN, too, will benefit from its close association with the Saudi Exchange and the Saudi Investment Fund, enabling it to offer innovative solutions to investors in Saudi Arabia and across the entire MENA region. Dr. Waleed AlBallaa – the CEO of DirectFN, is optimistic that the acquisition will boost the digital transformation in the Saudi Capital Market.
Mohammed Al Nory, CEO of Wamid, said that the acquisition would result in investors taking advantage of innovative technologies which will add value to their investment strategies.
Vision 2030
The world is moving away from oil-dependent products. As such, the clout that Saudi Arabia has is in danger. In order to decrease its dependence on oil for its economic growth, Saudi Arabia has developed a strategic framework termed Vision 2030. The creation of Saudi Tadawul Group and Wamid’s acquisition of DirectFN – all have this one aim of reducing Saudi Arabia’s dependence on oil. The acquisition will boost the Saudi government’s aim of creating a robust domestic capital market that would attract global market players resulting in more investment in-flows.