CMC Markets (LON: CMCX), known for its CFD offerings, has written off its £2.8 million investment in Strike X, a customer-centric blockchain solutions business it acquired in June 2023.
CMC’s Failed Entry into Blockchain
The London-headquartered CFDs broker holds a 33% stake in Strike X Technologies, which, at the time of the investment, marked its entrance into the blockchain space. However, the broker has now concluded that the investment amount is not recoverable, writing off the full carrying value.
Lord Cruddas, CMC Markets Chief Executive and Founder, Source: CMC
The broker also noted that Strike X is actively seeking third-party capital through one of its subsidiaries to improve its financial position. It added: “Despite the impairment, the Group continues to support Strike X and its strategic objectives.”
B2B Revenue from Revolut Is “Not Significant”
CMC Markets further confirmed it has begun onboarding clients through its partnership with Revolut, which was established last June. Revolut’s CFD clients are being onboarded onto its new platform, Revolut Invest, which has been launched in three European countries: the Czech Republic, Denmark, and Greece.
However, the brokerage also highlighted that the impact of the Revolut deal on its B2B revenue is “not significant” due to limited geographical coverage. Nonetheless, the British fintech firm plans to expand its CFD offerings across the European Union and has obtained a new UK licence to offer financial derivatives.
“This partnership presents an exciting opportunity for future revenue growth,” added CMC, “as well as increased operational leverage given the limited incremental costs required to service these customers.”
Finance Magnates earlier discussed with two CMC executives how the Revolut deal materialised.
According to its latest financials, CMC Markets generated £177.4 million in revenue between April and September, representing a yearly gain of 45% but a decline of 15.6% compared to the previous six months.
Despite CMC’s dominance in the retail space, it is now significantly strengthening its B2B presence. In the first six months of the current fiscal year, B2B services contributed 28% of its trading volume, compared to 31% and 35% in the two halves of the previous fiscal year.
