Monese has been acquired by fellow FinTech Pockit after HSBC became the latest investor to write off its investment.
Monese was founded in 2015 as the UK鈥檚 first app-based bank and has customers across Europe. It looked set to become a unicorn – valued at more than $1 billion – in 2020 when it entered talks to secure 拢100m in investment.
However it would fall further behind digital banking rivals Revolut, Monzo and Starling, with pre-tax losses widening to 拢30.5 million in 2022, despite revenue climbing to 拢27.7m.
Late last year investor Kinnevik wrote off its holding in the company, which subsequently warned there was 鈥渕aterial uncertainty on the success of raising future fundraising鈥� which undermined the business continuing as a 鈥済oing concern鈥�.
When HSBC recently wrote off its remaining stake just two years after injecting $35m into the firm as part of a strategic partnership, it entered a debt agreement with Pockit to secure working capital.
Now the companies have announced that Pockit, which provides digital accounts to 900,000 people 鈥榰nderserved鈥� by traditional banks, has acquired Monese, creating a combined customer base of around 3m people and generating almost 拢30m in annualised revenue.
Monese鈥檚 other investors are PayPal, Augmentum Fintech and International Consolidated Airlines.
The deal, subject to 鈥榗hange in control鈥� approval by the FCA, will see Pockit and its shareholders – led by Puma Growth Partners – make a significant injection of up to 拢15m in equity capital to fund the integration and future growth of the business.聽
Further financial terms of the deal are undisclosed.
Pockit says it will benefit from Monese鈥檚 regulatory infrastructure – including electronic money and consumer credit licences – and their complementary product offerings and geographic footprints. The transaction will allow Pockit to accelerate the roll-out of new services, such as Monese鈥檚 multi-currency accounts, on top of an existing product suite that includes digital accounts, salary advance and credit-building.
鈥淭here will be no impact on customers of either Pockit or Monese upon completion of the deal, with the two separate services continuing to run independently until a careful review and integration process has been completed,鈥� they stated.聽
Pockit founder and CEO Virraj Jatania will lead the enlarged business. Norris Koppel, founder and CEO of Monese, will remain involved with the combined company post-completion to help ensure a smooth transition.
鈥淭his is a transformational acquisition for Pockit,鈥� said Jatania. 鈥淚t immediately propels us to a size where we can support financial inclusion for a critical mass of people who would otherwise be locked out of mainstream finance.聽
鈥淲hile nothing will change for our 3m customers in the short term, over time this deal will result in new products and an enhanced in-app money management experience. We鈥檙e also delighted to be welcoming the talented Monese team that Norris has built to advance our shared mission of providing essential financial services in an accessible, transparent and affordable way.鈥�
Koppel added: 鈥淭his new era with Pockit is a fantastic way to build on our success and to scale our offering to more customers, and comes at a time when we are approaching profitability. These two businesses have closely aligned customer bases and missions, and are highly complementary in terms of products and geographic footprint.聽
鈥淲e are looking forward to working with Virraj and the wider Pockit team on the next chapter.鈥�