Optimizer and Kinetic put $2m into financial trading affiliate start-up

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The chief executive of Optimizer Invest said the company had proceeded with its investment in the financial trading affiliate Investoo despite the regulatory worries surrounding the sector which caused a slump in the share prices of the sector leaders.

Optimizer Invest contributed to the $2m funding round for Investoo late in December alongside the previous owners of Right Casino (who sold out to Catena Media in October 2015) and another venture capital firm Kinetic Investments.

Investoo is an online trading school with 50,000-plus member that offers courses to consumers on how to trade Contracts for Difference (CFDs), financial spread-betting and forex trading.

The news of the new funding for Investoo came a matter of days after comments first from the Cyprus financial watchdog CySEC and then from the Financial Conduct Authority (FCA) in the UK regarding the limiting of leverage limits for consumer financial trading.

The FCA also made comments that indicated that it did not consider binary options a suitable product for speculative retail trading. The regulation of binary options is slated to move from the purview of the UK Gambling Commission to the FCA within the next two years.

The FCA proposals in early December pulled the rug from under the share prices of the listed companies in this sector including IG Group, CMC Markets and Plus 500 which between them lost close to £1bn in value on December 6, the day of the FCA announcement.

Carla Vella, chief executive at Optimizer Invest, suggested the company was not worried about the increased regulatory focus on the financial trading sector. “With our long experience and backgrounds working in gambling we rarely get worried with such news,” he old GamCrowd News. “It is in the nature of our business to be agile enough for market and regulatory changes. We perceive it as an opportunity to be creative and work with any limitations that markets present.”

The hope for the new investors is that Investoo will grow to become one of the largest affiliates in the retail financial trading space, said Vella. “I’m optimistic, so I think this area of business will be a significant size in a few years. We are excited about being one of the first movers in this space.”

Investoo founder Adam Grunwerg, who has previously worked with the founder of Right Casino, Sam Miranda, said the recent furore regarding leverage limits and suitability played to his website’s strengths. “It makes thinks like trading education more important, sending high-value traders and clients who understand the risks involved and understand how to trade,” he said. “Rather than just sending traffic that is going to lose their money right away from a bonus or other scheme.”

Both Grunwerg and Vella suggested a good comparison from the gambling sector was PokerStrategy, the affiliate business that was snapped up by Playtech more than three years ago.

“I consider Investoo to be in the forefront of introducing and educating the public to financial trading,” said Vela. “It is such an interesting area and for many years it has felt like something that is only possible to understand by professionals within the sector. I embrace the fact that Investoo aims to break down the barriers and bring trading to broader audiences.”

Vella said the focus for Optimizer Invest with regard to the financial trading sector would be on the affiliate side, though she didn’t rule out potentially getting involved in the operations side. “Right now the focus is growth within the current scope of business, that includes building the team itself as well as working on affiliation in this space,” he said. “Operators are not in focus at present, but that said, we will never say never.”