The recent acquisition of OANDA by FTMO marks a significant shift in the retail trading industry. It highlights how traditional brokers who fail to innovate risk losing market dominance. This unprecedented move represents the first instance of a prop trading firm acquiring a major retail broker, inverting the usual industry pattern.
OANDA Legacy vs. FTMO
Innovation
OANDA, once a powerhouse in the retail trading space due to its strong regulatory standing across seven Tier-1 jurisdictions, gradually lost market momentum under CVC’s ownership. Despite maintaining high trust among retail traders, the broker struggled to keep pace with evolving market demands, particularly in pricing competitiveness.
Since 1996,
OANDA has been considered one of the leaders and pioneers in online trading,
including CFDs. In 2018, it was acquired by CVC Capital Partners, a fund
managing nearly $200 billion. Although initially it was suggested that there
would be no changes in the company’s leadership, the then-CEO Vatsa Narasimha
was demoted to Non-Executive Director, ultimately leaving the company in
January 2020.
What was once one of the top three brokerage firms worldwide was reportedly weakened by the fund’s management. Coupled with rising competition, this resulted in the firm’s gradual decline. The company attempted to save itself by acquiring TMS, Poland’s second-largest broker, in 2020, which was finalized in 2021. However, this did not provide sufficient momentum for further growth, especially since XTB had become the dominant player in the local market.
Meanwhile,
FTMO, which started in 2015, has been growing steadily. The Czech prop firm has
become so large and confident that it decided to acquire OANDA from CVC for its
purposes. The potential benefits from this acquisition could be substantial.
When a Prop Firm Acquires
a Broker
FTMO’s
acquisition strategy appears well-calculated, targeting OANDA’s robust
regulatory framework while planning to operate it as a standalone business.
Finance Magnates has learned through insider discussions that this move isn’t
about acquiring a brand, but rather about securing established regulations and
the expertise of people who know how to manage these regulations. OANDA holds
licenses in the USA, where obtaining local market licenses is notably
challenging.
“By
acquiring OANDA, FTMO basically gains access to a team that knows how to
navigate a lot of these challenges—regulation, getting licenses—it’s like
having a seasoned guide in one of the trickiest markets in the world,”
commented Kathy Lien from BKTraders.
Furthermore,
running a prop trading business becomes much easier when having a fully
licensed FX/CFD broker in the portfolio. As Lien from BKTraders pointed out, a
licensed broker can directly access liquidity providers and interbank markets,
eliminating the need for third-party companies. This enables immediate
execution of hedging positions and better control over trading costs and
spreads.
Prop Trading Industry’s
Pain Points in 2024
Traders are
becoming increasingly successful, generating substantial costs for prop trading
firms, which has led to the downfall of many such companies. In 2024 alone, 40
such businesses have ceased operations. OANDA’s infrastructure and direct
market access could help FTMO hedge trades directly, thereby reducing the risk
of large-scale payouts destabilizing the firm’s financial stability.
“One of the
biggest challenges for prop firms is handling their top traders who
consistently hit the profit targets,” added Lien. “Without solid risk
management and experience, this can expose the firms to significant financial
strains.”
It’s no
coincidence that as prop trading has become increasingly popular in recent
months, many FX/CFD brokers have started joining this trend. For them, running
a prop trading business is both easier and more cost-effective. OANDA itself
recognized this opportunity and launched its OANDA Prop Trader brand over a
year ago.
Brand Power Dynamics
The
acquisition reveals an interesting dynamic in brand strength. While OANDA
maintains significant recognition in the US market, FTMO has emerged as a more
powerful global brand in recent years. This is evidenced by FTMO’s impressive
growth, generating over $213 million in turnover in 2023, marking a 20%
year-over-year increase.
Additionally,
the Czech firm reported that the number of open trading accounts exceeded 2.3
million in 2024—a 33% increase from the previous year. It also noted an 80%
rise in total payouts to traders in the first seven months of 2024 compared to
the same period the previous year.
The OANDA
transaction also signals a broader trend toward industry consolidation, with
FTMO’s co-founders predicting that 2-3 major players will eventually control
70-80% of the market. The acquisition demonstrates how prop trading firms,
traditionally seen as market disruptors, are now becoming major institutional
players.
“The industry is probably going to stabilize between say 2-3 players which will take 70-80% of the market,” Otakar Suffner, the Co-Founder of FTMO commented during FMLS:23.
How Much Could FTMO Have
Paid for OANDA
While the
financial terms of the deal weren’t disclosed, CVC purchased OANDA in 2018 for
$175 million. At that time, the company claimed to have approximately 100,000
active traders worldwide.
Assuming
the company’s valuation remained stable, the acquisition cost per OANDA client
for FTMO would amount to $1,750. However, these are merely estimates, and the
final cost per client could be significantly different, especially considering
OANDA’s structural changes and diversification under CVC ownership in recent
years.
The recent acquisition of OANDA by FTMO marks a significant shift in the retail trading industry. It highlights how traditional brokers who fail to innovate risk losing market dominance. This unprecedented move represents the first instance of a prop trading firm acquiring a major retail broker, inverting the usual industry pattern.
OANDA Legacy vs. FTMO
Innovation
OANDA, once a powerhouse in the retail trading space due to its strong regulatory standing across seven Tier-1 jurisdictions, gradually lost market momentum under CVC’s ownership. Despite maintaining high trust among retail traders, the broker struggled to keep pace with evolving market demands, particularly in pricing competitiveness.
Since 1996,
OANDA has been considered one of the leaders and pioneers in online trading,
including CFDs. In 2018, it was acquired by CVC Capital Partners, a fund
managing nearly $200 billion. Although initially it was suggested that there
would be no changes in the company’s leadership, the then-CEO Vatsa Narasimha
was demoted to Non-Executive Director, ultimately leaving the company in
January 2020.
What was once one of the top three brokerage firms worldwide was reportedly weakened by the fund’s management. Coupled with rising competition, this resulted in the firm’s gradual decline. The company attempted to save itself by acquiring TMS, Poland’s second-largest broker, in 2020, which was finalized in 2021. However, this did not provide sufficient momentum for further growth, especially since XTB had become the dominant player in the local market.
Meanwhile,
FTMO, which started in 2015, has been growing steadily. The Czech prop firm has
become so large and confident that it decided to acquire OANDA from CVC for its
purposes. The potential benefits from this acquisition could be substantial.
When a Prop Firm Acquires
a Broker
FTMO’s
acquisition strategy appears well-calculated, targeting OANDA’s robust
regulatory framework while planning to operate it as a standalone business.
Finance Magnates has learned through insider discussions that this move isn’t
about acquiring a brand, but rather about securing established regulations and
the expertise of people who know how to manage these regulations. OANDA holds
licenses in the USA, where obtaining local market licenses is notably
challenging.
“By
acquiring OANDA, FTMO basically gains access to a team that knows how to
navigate a lot of these challenges—regulation, getting licenses—it’s like
having a seasoned guide in one of the trickiest markets in the world,”
commented Kathy Lien from BKTraders.
Furthermore,
running a prop trading business becomes much easier when having a fully
licensed FX/CFD broker in the portfolio. As Lien from BKTraders pointed out, a
licensed broker can directly access liquidity providers and interbank markets,
eliminating the need for third-party companies. This enables immediate
execution of hedging positions and better control over trading costs and
spreads.
Prop Trading Industry’s
Pain Points in 2024
Traders are
becoming increasingly successful, generating substantial costs for prop trading
firms, which has led to the downfall of many such companies. In 2024 alone, 40
such businesses have ceased operations. OANDA’s infrastructure and direct
market access could help FTMO hedge trades directly, thereby reducing the risk
of large-scale payouts destabilizing the firm’s financial stability.
“One of the
biggest challenges for prop firms is handling their top traders who
consistently hit the profit targets,” added Lien. “Without solid risk
management and experience, this can expose the firms to significant financial
strains.”
It’s no
coincidence that as prop trading has become increasingly popular in recent
months, many FX/CFD brokers have started joining this trend. For them, running
a prop trading business is both easier and more cost-effective. OANDA itself
recognized this opportunity and launched its OANDA Prop Trader brand over a
year ago.
Brand Power Dynamics
The
acquisition reveals an interesting dynamic in brand strength. While OANDA
maintains significant recognition in the US market, FTMO has emerged as a more
powerful global brand in recent years. This is evidenced by FTMO’s impressive
growth, generating over $213 million in turnover in 2023, marking a 20%
year-over-year increase.
Additionally,
the Czech firm reported that the number of open trading accounts exceeded 2.3
million in 2024—a 33% increase from the previous year. It also noted an 80%
rise in total payouts to traders in the first seven months of 2024 compared to
the same period the previous year.
The OANDA
transaction also signals a broader trend toward industry consolidation, with
FTMO’s co-founders predicting that 2-3 major players will eventually control
70-80% of the market. The acquisition demonstrates how prop trading firms,
traditionally seen as market disruptors, are now becoming major institutional
players.
“The industry is probably going to stabilize between say 2-3 players which will take 70-80% of the market,” Otakar Suffner, the Co-Founder of FTMO commented during FMLS:23.
How Much Could FTMO Have
Paid for OANDA
While the
financial terms of the deal weren’t disclosed, CVC purchased OANDA in 2018 for
$175 million. At that time, the company claimed to have approximately 100,000
active traders worldwide.
Assuming
the company’s valuation remained stable, the acquisition cost per OANDA client
for FTMO would amount to $1,750. However, these are merely estimates, and the
final cost per client could be significantly different, especially considering
OANDA’s structural changes and diversification under CVC ownership in recent
years.
This post is originally published on FINANCEMAGNATES.
