Temenos acquires US-headquartered SaaS vendor Avoka to strengthen its leading Digital Front Office banking product
Combining Avoka's award winning customer acquisition and onboarding product, Temenos offers banks a faster route to frictionless omni-channel digital banking
GENEVA, Switzerland – December 12, 2018 – Temenos (SIX: TEMN), the banking software company, today announces it has agreed to acquire Avoka, a leader in digital customer acquisition and onboarding, subject to regulatory approvals. The acquisition further strengthens the Temenos Digital Front Office product, which has over 300 banking clients and has been recognized as a leader by top analyst houses such as Forrester and Ovum. The Avoka platform will be integrated with the Temenos Digital Front Office product, providing banks with a comprehensive single solution for their omni-channel digital banking needs. Temenos has agreed to purchase Avoka for USD 245 million.
Through this acquisition, Temenos continues to bring innovative capabilities to its Digital Front Office product that includes origination, channels, analytics, payments, risk and compliance and real-time event based marketing services all of which can be deployed either on premise or in the cloud.
Avoka has more than 85 customers that are largely served through a SaaS model hosted on the cloud, and serves all key banking segments including retail, corporate and wealth. Founded in Australia, its customer base has grown most 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, Avoka is purpose-built for creating omni-channel customer acquisition and onboarding solutions that enable banks to create simple customer-friendly experiences that improve conversion rates. Avoka clients such as a top tier bank increased new account opening by 60% and shortened customer time to onboard by nearly 70%, while another major bank created an advisor-assisted, tablet-based loan application, from kickoff to launch in 60 days.
Digital customers accustomed to a one-click retail experience expect the same from their bank and through Avoka , banks have been able to create the fastest and simplest account opening and onboarding experiences resulting in significant reductions in abandon rates and increased cross-sales. Through open APIs, Avoka offers plug and play integration to a catalogue of third-party Fintech services as well as CRM, fraud detection, risk, identity verification and analytics platforms enabling banks to accelerate their speed to market while managing compliance and risk.
Avoka's innovative technology has won numerous awards, including the 2018 Celent Model Bank for Commercial Account Onboarding with HSBC, The Banker's Tech Project Awards 2018 with HSBC for the compliance category, The Banker's Tech Project Awards 2018 with Citi for delivery channels the 2017 Banking Technology Awards as well as the Australian Business Banking Awards 2017 with Bankwest.
Max Chuard, Chief Financial Officer and Chief Operating Officer, Temenos, said:
"This is a highly strategic acquisition for Temenos as it not only reinforces our leadership position within the Digital Front Office space but it also strengthens our capabilities in the US market where we are seeing significant traction as banks accelerate their digital transformation plans. Avoka is a market leader and is experiencing strong growth as banks invest in creating outstanding customer acquisition and onboarding experiences. The combination of Avoka's capabilities along with the extensive Temenos Digital Front Office product offers banks the most complete set of services which through APIs can be easily integrated either with the market leading Temenos T24 Core Banking product or as a standalone on a third party banking system. These are truly exciting times and we look forward to offering banks a faster route to creating seamless digital customer experiences".
Philip Copeland, Chief Executive Officer, Avoka, said:
"Avoka is the recognized leader for customer acquisition and onboarding. By combining our strengths with Temenos' expertise and reach, we will expand our scope and scale to deliver winning omni-channel, digital experience solutions to banks globally. The combination of Temenos and Avoka is an excellent fit for our customers and employees and will catapult our growth to the next stage. Together, with the leadership on both sides, we are committed to the group's future success."
The transaction is due to be completed by early Q1 2019 and is subject to regulatory approvals. The consideration for the acquisition is USD 245m, to be funded through cash and debt. Avoka's total revenue grew c.30% in 2018 and is expected to grow at the same rate in 2019 to reach c.USD50m, with 50% of total revenue from recurring SaaS product revenues. The acquisition is expected to be non-IFRS EPS neutral in 2019, accretive from 2020 and to achieve group margin within two years.