Pockit has acquired Monese for an undisclosed sum, securing the long-term future of the London fintech that had warned on its ability to raise funds.
Pockit founder and CEO Virraj Jatania will lead the enlarged business, with the two separate services continuing to run independently until a review and integration process has been completed.
Monese entered into a debt agreement in September, company filings show, with Pockit acting as the lender. The company said this week it would also provide an injection of up to £15 million in equity capital to fund the integration and future growth of the business.
Virraj Jatania, CEO and founder of Pockit, said the deal “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.”
Monese, which counts PayPal, HSBC and British Airways owner IAG among its major shareholders, warned earlier this year that there was “material uncertainty on the success of raising future fundraising” which undermined the “going concern” status of the business.
In accounts filed with Companies House, the money transfer business posted a loss of £30.5 million in 2022, an increase of almost 70% on the previous year and outstripping revenues of £27.7 million over the same period. A Monese spokesperson said losses had since fallen to single-digit millions in 2023 but was unable to offer a precise figure.
HSBC became one of the biggest shareholders of Monese after the bank committed $35m in investment in September 2022. But in an apparent strategy pivot, HSBC earlier this year said it was launching its own money transfer app, Zing, in a bid to build its own market share and ‘attack’ dominant international payments fintechs.
HSBC has since cut the value of its stake in Monese to zero, recent accounts from its investment subsidiary show.
In May, Monese announced it would spin out XYB, its B2B Platform as a Service (PaaS) technology arm, to become an independent company.
Cardiff-based fintech Pockit specialises in lending money to low-income customers with a poor credit score or who have been denied credit or a loan elsewhere, according to the company’s website. However, to date the firm’s business activity has concerned offering banking services to individuals rather than lending to other businesses.
In August, Pockit raised £7.9m in a funding round led by Puma Private Equity. with participation from the North East Development Capital Fund, which supported the opening of a Newcastle office for the fintech.