|AND AN ARTICLE ABOUT THEIR "DYNAMIC" LEADER AS WELL:|
Published On: 01/24/2001
Calgary software firm automates exchanges around the world
Story By: Mike Dempster
He has hopscotched the world, signing million-dollar deals at the expense of competitors with international profiles and formidable resources.
At times, he's been a one-man band drumming up business 14 time zones away with people who had never heard of Calgary.
But David Ewasuik, soft-spoken president and CEO of EFA Software Services Ltd., found the secret to success.
'When you were small like we were, you had to make yourself look bigger," says Ewasuik. "We did it by building partnerships."
Created from humble beginnings in 1985 when Ewasuik landed a contract to begin the electronic automation of the Alberta Stock Exchange, EFA has grown into a company with 165 employees, an annual growth rate of about 40 per cent and projected revenues of $25 million for 2001.
Beginning in 1992 when EFA set up its first international stock exchange in Guatemala, the company has built or updated exchange systems in more than 30 countries across the world, from Boston to the Bahamas to Bucharest.
Privately held, EFA plans to go public this spring with the intent of raising $20 million through an initial public offering. "We've always grown with cash flow in the past, which is a nice way to grow," says Ewasuik, the majority shareholder. 'But it has always restricted our growth. "What people are looking for are companies that have growing revenues and growing profits. We've always been profitable and always brought in revenue. We're attractive in that way."
Ewasuik's company is the dominant force in automating the small and mid-sized stock exchanges, and the firm wants to set up beachheads in London and New York.
Born in Kamsack, Sask., the 44-year-old father of two young boys says he never imagined he'd be running a multi-million-dollar company after arriving in Calgary in 1983 sporting a bachelor of commerce and computer science degree.
Things just unfolded, he says. After receiving the ASE contract and consulting for a few years, Ewasuik became serious about taking on the international business set in 1989. He had seen the Berlin Wall come down and envisioned a world of opportunities.
'I asked myself: 'What's the worst thing that could happen if it fails? Nothing. I'd have some nice places to visit,' ' he says.
Ewasuik and his small staff began laying the cornerstones of their international success - making themselves bigger through partnerships. EFA had the software know-how, but wondered how to get the ear of CEOs of exchanges in far-flung countries that wanted to build or upgrade a system. EFA devised a strategy.
"He (the CEO) is going to contact hardware vendors like IBM," says Ewasuik, who had forged ties with IBM (now a shareholder in EFA). "So that was covered. And he's going to contact consultants who advise businesses. So we made sure we were well known to the people advising people. There are not too many people who do that in the world. So we made ourselves well known to them.'
Consultants were brought to Calgary, and shown what EFA had done for the ASE. (About 80 per cent of the world's exchanges are smaller than the ASE, which merged with the Vancouver Stock Exchange to form the Canadian Venture Exchange in the fall of 1999.)
Suddenly, says Ewasuik, EFA was on bidding lists, and winning contracts.
Although Calgary is far from the major financial centres, it's proven to be an asset for EFA. The cost of doing business is cheaper, retaining staff easier and not taking orders from a head office elsewhere allows for flexibility, says Ewasuik. Employees feel they are 'the pulse' of the firm.
Being the only company of its kind in Calgary certainly helps, adds chief financial officer Don Gleason, noting EFA monitors wages in the high-tech sector and is competitive.
What EFA offers are two major packages: a trading package; and a clearing, settlement and depository registry package.
In simple terms, the trading package allows a customer order to be typed in on a broker-backed office system that is connected to EFA's trading system. A message is then sent back to the broker, even while the customer is on the phone, that the order's been taken.
The second package provides a registry of all shareholders of a stock, shows where a certificate of stock is deposited and provides that a central party guarantees payment.
'The two systems are connected, unlike many competitors who might have one or the other," explains Ewasuik. "You put your order in to sell. The system checks to make sure you're the real shareholder, and you've got the right amount. There are no mistakes . . . things happen faster."
The company has created business spinoffs. Prism, a production and revenue accounting software package, is used by 30 of the top 100 oil and gas companies in Calgary.
Last month, EFA made news by being chosen, in partnership with the Canadian Venture Exchange, to develop the computerized links between existing Canadian exchanges and new electronic stock markets expected to emerge in the near future. The goal of the system is to consolidate all quotes in one place, making investors aware of the best prices when they trade.
EFA is diversifying - specifically in the over-the-counter sale of deregulated electricity. Again, it is forging alliances, this time with Scandinavian energy firms Vattenfall and Hafslund AS, involved in the over-the-counter business for 10 years, and U.S. electricity broker CALPOL.
"We'd be the only clearing organization for electricity in the western U.S.A.," says Ewasuik, who expects the trading system operation to begin in the next few months.
As for his game plan of "visiting" a lot of nice places, he just laughs. No one takes along golf clubs or sunscreen, he says. It's all business.
'If you go with the chief operating officer you find he likes to do five countries in three days," says Ewasuik.
"I like to do one country a day."