Luma Financial Technologies — M&A Opportunities Playbook

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Section 1 — Preferred Target Profile

What makes a target more attractive beyond the strategic fit?

1.1 Size

Our financial budget sets a natural ceiling — no single deal should over expose us. Equally too many small targets can distract our integration capacity. Targets should be large enough to matter once integrated. Indicative size: $5M–$40M revenue.

1.2 Tech Stack

• API-first architecture (a working API layer)
• Cloud-native or cloud-ready
• Test coverage ≥20% and CI/CD pipeline (hard kill if absent)
• Compatible with Luma data architecture (or integratable within 6 months)

1.3 Customer Base

• Existing overlap with Luma's advisor base — cross-sell is faster
• Carrier relationships are a significant premium driver (especially life/annuity targets)
• Institutional preferred over retail

1.4 Revenue Model

Recurring fees, or transaction fees. Pure services is a poor fit (eg. consultancy).

1.5 Acquirability Signals

Positive: Founder open to exit; VC-backed with low growth; existing Luma partnership.

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Section 2 — Financial Capacity

How much can we spend? Where does this capacity come from?

2.1 Total Programme Budget

• Total budget: $100M over 24 months
• Per-deal hard cap: No single deal >$75M
• Reserve: $10M held back for time-sensitive opportunities

2.2 Budget Allocation by Vertical

2.3 Financing Sources

Execute from existing PE raise + creative deal structures. No new raise needed in near term.

Capital Stack

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Section 3 — Potential Targets

Who are we buying? How do we find them? How do we prioritise?

3.1 Technology & Infrastructure Opportunities

Luma's platform advantage depends on owning the data and integration layers that competitors cannot replicate.

A) Data, AI & Analytics

Current state: Product-specific data silos prevent an efficient ecosystem and create friction in product and client onboarding. Luma's Lifecycle Manager (LCM) has a strong build but limited extension into pre- and post-trade analytics. The ambition to become a central data partner requires owning key data assets and the AI/analytics layer that sits on top of them.

M&A thesis: Acquire proprietary datasets and/or analytics platforms that would take years to build organically. Partnerships where Luma's distribution can be leveraged with strong AI/analytics technology.

B) Integration Capabilities & Connectivity

Current state: Luma has strong issuer integration for structured products. Carrier connectivity for annuities and life insurance remains dependent on third-party infrastructure — a gap that became more acute when iCapital acquired Hexure/Firelight.

M&A thesis: Acquire/partner an annuity or life insurance infrastructure player that provides carrier data feeds and custodian access. NIC is the leading identified candidate. Fidex provides complementary annuity connectivity. Firelight and iPipeline are not acquisition targets.

C) Other Ecosystem Tools

Deepen lock-in beyond the core platform: carrier-side tools (analytics, product design, and pricing portals that make Luma indispensable to carriers, not just advisors) and advisor workflow reliance (compliance, legal, and CRM layers where operational dependency prevents switching on price alone).

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3.2 Product Expansion Opportunities

Luma leads in structured products. Extend that leadership into adjacent product verticals — annuities, asset management products (AMC/SP/ETF), and life insurance.

A) Asset Management Platform (AMC / Securitisation)

Current state: Be an early mover that extends AMC into related markets. Requires technology and expertise to execute.

M&A thesis: Acquire a platform that accelerates AMC technology and integrates with Luma's end-to-end workflows and geographic footprint. GenTwo is a target — also an EMEA SP beachhead that doubles as an AMC capability acquisition.

B) Life Insurance & Annuities

Current state: Luma lacks the carrier relationships and technology that exist in SP (UBS, BofA, ML-equivalent). Annuity adoption is further along than Life, but both still depend on third-party infrastructure for carrier connectivity. First-mover opportunity exists but the foundation may need to be built before M&A makes sense.

M&A thesis: Build-first then acquire a small life insurance distributor for instant relationship access.

C) OTC Derivatives

Current state: Luma is building OTC capability internally, leveraging structured note technology. Resource constraints limit execution speed in an otherwise fragmented, under-brokered market.

M&A thesis: Acquire an established player to create a barrier to entry and accelerate time to market.

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3.3 Geographic Expansion Opportunities

A) EMEA

Current state: Luma is under represented in EMEA. No single player has become the pan-European platform.

Competitive opportunity: LinkedTrade has established EMEA SP presence but lacks annuities. LexiFi (France) focuses on sell-side without buy-side lock-in. FinIQ is expanding from APAC into Europe. The consolidation window is open — but not forever.

B) APAC

Current state: Luma has strong sell-side integration via AQDQ but is otherwise locked out by established players. FinIQ processes $25B/month in APAC. The market is 80% platformed, leaving limited space for a new entrant.

Decision: No M&A capital deployed in APAC. Partnership and JV structures — test market fit beyond AQDQ before any capital commitment.

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3.4 Current Target Pipeline

A) Top Opportunities

B) Not Yet Assessed

The following targets have been identified in strategic discussions. Each requires a Strategic Screen before any outreach.

C) Off the Table for M&A (Partnership Only)

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