London-based fintech Monese has warned that its operations could be “severely affected” should it fail to secure future funding after its latest reports revealed heavy losses.
Monese, which offers multi-currency accounts and money transfer services, posted a loss of £30.5m in accounts for the year ended 31 December 2022, a 63% increase from the year before.
The company said in its report that the losses were a result of significant cost increases stemming from its expanding customer volume, with direct costs and admin expenses both rising dramatically.
Among the primary expenses were an increased investment into its platform’s tech and the cost of scaling up to meet new demands. The firm’s headcount averaged 349 employees during the year.
Monese’s customer boost resulted in a revenue increase of just under 60% to £27.7m. However, this was not enough to offset rising costs.
CEO Norris Koppel told UKTN that he felt confident the company’s performance in 2022 was successful and in line with its strategy. He added that Monese “performed strongly” in 2023 with “significant revenues and losses considerably lower”, although he did not provide specific figures.
A director’s report accompanying Monese’s 2022 accounts said there is “material uncertainty on the success of raising future fundraising and therefore the going concern status of the company”.
It follows a challenging year for tech startup funding, with UK venture capital funding falling by 54% in 2023.
The company secured £42.3m in equity funding in 2022, including a strategic investment from HSBC in September 2022. Monese has raised more than $200m (£158m) since it was founded in 2015, with other backers including PayPal and Investec.
Monese’s directors said they have a “reasonable expectation the company will continue to be successful raising additional funds”.
“Given its stage of evolution, the group is reliant on access to sufficient amounts of new funding to finance its current operations and growth plans,” Monese said.
“The group faces the risk that should such funding not be available, the ability of the group to conduct its operations in their current form will be adversely and potentially severely affected.”
The filing, first reported by Evening Standard, added that further losses are anticipated alongside the growth of the company and that it would seek additional funding to support future losses.