Monese founder to buy consumer arm in break-up

29 April 2024, 16:49 | Updated: 29 April 2024, 18:17

An HSBC-backed technology company which was in talks to raise funding at a valuation of over £1bn four years ago will this week confirm a plan to break itself up amid mounting losses.

Sky News has learnt that Norris Koppel, the founder and chief executive of Monese, is to take control of its consumer arm as a standalone entity.

Tera Ventures, an Estonian venture capital firm, is said to be backing the plan.

Its business-to-business arm, XYB, meanwhile, will be hived off and run as a separate entity by a new boss, according to people close to the company.

Monese's board was understood to be finalising the plans on Monday evening, with an announcement expected on Tuesday, they added.

The break-up plans were reported by Sky News earlier this month.

Monese targets customers who are underserved by mainstream banks, and has about 2 million customers in more than 30 countries.

It employs roughly 275 people.

The fintech has come under pressure from some investors to break itself up.

HSBC, the London-based banking behemoth, invested $35m in Monese in 2022 in exchange for a stake in the company.

A Monese spokesman said earlier this month: "The business has developed in two different directions: the original B2C business and now the new and fast-growing B2B PaaS (Platform as a Service) business.

"We are exploring the best organisational and capital structure for the company should be to maximise shareholder value."

In accounts filed earlier this year, Monese referred to "material uncertainty over the success of raising future fundraising and therefore the going concern status of the company".

Its other shareholders include Investec and Augmentum, the London-listed fintech investor.

At the time of its deal with HSBC, it said it had raised a total of more than $200m.

A source close to the company insisted that it had begun 2024 on a strong footing following robust performance last year.

They said Monese had seen continued revenue growth and losses reducing from £30.5m in 2022 to low single-digit millions.

"The company is approaching profitability in the near term," they added.

Monese and Interpath Advisory, which has been working on the restructuring, both declined to comment.

(c) Sky News 2024: Monese founder to buy consumer arm in break-up