SmartStream expands its global footprint

With a number of financial software vendors being bought by private equity outfits, the expectation more or less is that once they are pumped full of venture capital, they will embark on an acquisitions spree.

SunGard has certainly been busy acquiring companies following its acquisition by a consortium of private equity investors led by Silver Lake Partners. Others, however, prefer the more organic approach rather than having to integrate multiple acquisitions.

Following TA Associates' acquisition of 3i's majority stake in UK financial software vendor,SmartStream, acquisitions are not high on newly-appointed CEO Ken Archer's agenda at the moment.

Having been convinced to give up his job as president of European business development for Computer Sciences Corporation, a $4 billion operation, to go and run a smaller UK software outfit, Archer's strategy for the leading reconciliations and STP vendor so far has been to ramp up staffing and to expand the company's global footprint.

Over lunch at the Royal Exchange in London yesterday, Archer said SmartStream would expand its Asian and emerging market presence by establishing a presence in Beijing, China, where it recently signed a major deal with one of the top four banks. It is also increasing its sales strength in Singapore to address the Northern Asian market and there is also potentially going to be an office in Miami to expand sales in South America. SmartStream has also completed a feasibility study for setting up an office in Dubai.

Not many CEO's of financial software companies can boast that they don't really need more customers, but with more than 1000 customers, including 75 of the world's top 100 banks, Archer says it is not so much about acquiring more customers, but about being able to sell more to its existing customer base, and eliminating some of the barriers to straight-through processing via its STP Control Architecture.

Approximately 70% of SmartStream's customers use its Corona platform to address reconciliations challenges. TLM Corona which offers the reconciliations functionality of Corona coupled with its thin client web portal, WebConnect. SmartStream boats that its solutions are able to scale much more efficiently than its competitors, with the ability to process millions of reconciliations an hour in real time.

SmartStream subscribes to the belief that reconciliations are "instrument agnostic" so its solutions tend to span multiple asset classes (cash, securities, FX, derivatives). Utility computing is also an area of increasing focus for the UK software vendor in terms of providing a cost effective increasingly scalable solution for the processing intensive nature of reconciliations.