FinTech Monese has been bailed out by Cardiff-based digital banking provider Pockit after HSBC became the latest investor to write off its investment in the troubled London company.
The takeover comes after Monese failed to raise new funds and posted a pre-tax loss of £30.5 million in 2022, despite a rise in revenues to £27.7 million.
Founded in 2015 as Britain’s first app-based bank, Monese was once seen as a potential unicorn, with a valuation expected to top $1 billion. However, it lagged behind competitors such as Revolut, Monzo and Starling Bank. HSBC’s $35 million investment in 2021 as part of a strategic partnership was recently written off, leaving Monese in need of a rescue.
Pockit, which serves 900,000 customers ‘underserved’ by traditional banks, has now acquired Monese, creating a combined customer base of around 3 million people and generating almost £30 million in annual revenue. Pockit will benefit from Monese’s regulatory infrastructure and product offering, allowing it to accelerate new services such as multi-currency accounts.
The deal, pending FCA approval, will see a capital injection of up to £15 million from Pockit shareholders, led by Puma Growth Partners, to fund the integration and future growth. The financial terms of the acquisition have not yet been disclosed.
Pockit CEO Virraj Jatania will lead the expanded company, with Monese founder Norris Koppel remaining involved to ensure a smooth transition. The services of both companies will continue independently for the time being, with a careful evaluation process planned.
“This is a transformational acquisition for Pockit,” said Jatania. “It immediately propels us to a size where we can support financial inclusion for a critical mass of people who are excluded from the mainstream financial sector. Over time, this deal will deliver new products and an improved in-app experience.”
Koppel added: “This new era with Pockit is a fantastic way to build on our success. The two companies are highly complementary in terms of products and geographic footprint, and we look forward to the next chapter.”