Goldman Sachs-backed salary lender Neyber in talks with administrators

Written by Ruby Hinchliffe
25th February 2020

Neyber, the lendtech which helps major companies such as Royal Mail, Asda and TalkTalk offer their employees salary advances with interest, is understood to be in talks with administrators to avoid a total collapse, Sky News reports.

Founded by former Goldman Sachs investment bankers Martin ljaha and Monica Kalia in 2014, Neyber went on to secure £100 million from the US bank giant in 2017. Now, the company is talking to Binder Dijker Otte (BDO), an international network of business advisory firms, about all its strategic options.

A Neyber employee has confirmed to Sky that the company has stopped making new loans, saying the pause in business “would only be for a few weeks”. Co-founder Kalia says the suggestions of financial distress are “factually incorrect”, calling the Neyber “a thriving and ongoing business with over two million customers”.

The news of Neyber’s discussions with BDO comes just a week after Sky learned the lendtech was holding talks with prospective investors for a quick funding round – including its biggest UK rival, Salary Finance. Fellow co-founder Ijaha said the leaked funding presentation, which suggested the company needed £5 million in new equity alongside £8 million from existing investors, was “nothing to do with me”.

According to the documents, the company would be valued at just £23 million after a fundraising.

Backed by Legal & General, Salary Finance is now being pitted as the most favourable in the running for Neyber’s “pre-pack” sale, which could see Salary Finance acquire Neyber’s loan portfolio and other assets before the appointment of administrators. The Neyber rival is now understood to be reviewing whether the deal is worth it.

This means the lendtech is reviewing both funding options and sale options, and only if these two fail to avail a plan to come back from potential collapse will Neyber resort to the administration-only route. Of course, if the company does enter into administration, it would be a big blow to Goldman’s reputation as a sturdy investor.

The bank has not revealed the size of its stake in Neyber, but Sky sources say it is not more than 5%. Police Mutual is Neyber’s founding client and is facing a much bigger blow as a more substantial shareholder in the company.

Reasons for the downturn are not currently clear. City AM and Sky cite poor reviews on Trustpilot as part of the potential cause, which complain about long response times and previously-approved loans being cancelled. The company said in response that it had made “operational changes” which “had a negative impact” on its customers.

Neyber’s losses are a matter of public record. Accounts filed at Companies House for the period to 31 March 2018, show that it made a loss of nearly £16 million, on top of its £7 million loss the previous year.

Whilst Neyber charges its own rate on its loans ranging from 3.9% to 18.9%, another competitor trying to tap the UK salary-deducted consumer loans space is SalaryFits. The Brazil-founded company acts as an “aggregator” offering employers access to all the national banks, making money from the lenders on the loans that are paid back.

SalaryFits currently works with 120 employers in the UK, including Neyber’s customer Royal Mail.