Monese has borrowed funds from Pockit as HSBC writes down its investment, highlighting financial challenges and strategic shifts.
- The fintech company Monese has resorted to borrowing from Pockit, seeking fresh avenues for funding.
- HSBC’s recent decision to write down its investment in Monese underscores a pivot in the bank’s strategic direction.
- Monese’s financial troubles are marked by significant losses and concerns over future fundraising capabilities.
- Pockit had been in advanced discussions to acquire Monese’s consumer division, showcasing its interest in expansion.
Monese, a London-based fintech company, has recently borrowed funds from the card company Pockit as it navigates its financial hurdles. This move comes in the wake of HSBC, a significant shareholder, writing down the value of its investment in Monese. Fresh company filings reveal a debt agreement with Pockit, although specific terms remain undisclosed, and neither company responded to requests for comment.
HSBC had committed $35 million to Monese in September 2022, becoming one of its largest shareholders. However, early this year, HSBC shifted its strategy by launching its own money transfer app, Zing, aimed at capturing a larger market share and challenging established international payment fintechs. Consequently, HSBC has now reduced the value of its stake in Monese to zero, as reflected in recent financial reports from its investment subsidiary.
Monese has been grappling with financial difficulties as evidenced by a reported loss of £30.5 million in 2022, a sharp increase of nearly 70% over the previous year. These losses have overshadowed its revenues of £27.7 million for the same period. A spokesperson from Monese indicated that losses have since decreased to single-digit millions in 2023, although precise figures were not provided.
Furthermore, earlier in the year, Monese announced its intention to spin off XYB, its B2B platform as a service (PaaS) technology arm, establishing it as an independent entity. This move is part of Monese’s efforts to streamline operations and focus on core business areas amidst its financial challenges.
In contrast, Cardiff-based Pockit, known for providing financial services to low-income customers with limited credit access, raised £7.9 million in August in a funding round led by Puma Private Equity. Despite its primary focus on individual banking services, Pockit had reportedly been engaged in advanced talks to acquire Monese’s consumer division, reflecting its strategic interests in growth and expansion.
In conclusion, Monese’s recent financial actions and partnerships underscore the complexities of maintaining growth and stability in the fintech sector amidst evolving strategic objectives.
