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HSBC-backed fintech Monese is considering splitting its operations as it grapples with increasing losses.
Monese, boasting a customer base of two million individuals, is collaborating with Interpath Advisory on a strategic initiative to split into two distinct entities, Sky News has learned.
The HSBC-backed technology firm, once on the verge of securing funding at a valuation exceeding £1 billion four years ago, now faces mounting losses, prompting the decision to undergo a corporate restructuring.
City insiders reveal that Monese, known for catering to underserved banking customers, is exploring a division into separate consumer-facing and corporate entities under the guidance of Interpath Advisory. This move could potentially pave the way for a sale or further restructuring down the line.
With operations spanning more than 30 countries and a workforce of approximately 275 employees, Monese has briefed its staff on these proposed plans.
Led by Norris Koppel, Monese has been actively seeking additional capital over the past year amid investor pressure to evaluate restructuring options. Its business-to-business arm, XYB, reportedly plays a crucial role in powering HSBC’s retail banking app.
In response to inquiries, a Monese spokesperson stated, “The business has evolved in two distinct directions: the original B2C business and the newer, rapidly growing B2B PaaS (Platform as a Service) business. We are exploring the optimal organizational and capital structure to maximize shareholder value.”
In its recent financial filings, Monese highlighted “material uncertainty” regarding future fundraising success and its going concern status. Despite this, the company’s shareholders, including Investec and Augmentum, have remained supportive.
Despite facing challenges, Monese has reported continued revenue growth and a significant reduction in losses, signaling a path towards profitability in the near term.
The implementation of Monese’s break-up plans is expected to unfold over several months amid a challenging funding landscape for fintech firms.
Source: news.sky.com
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