Fiinu to scale back operations amid continued efforts to source fresh funding
UK banking start-up Fiinu has said it plans to scale back operations and embark on cost-cutting measures at its subsidiaries, Fiinu 2 Limited and Fiinu Holdings Limited, as the firm struggles to source the additional funding required for it to restart its banking licence application with UK regulators.
Fiinu embarks on cost-cutting measures
In a company announcement dated 28 April 2023, Fiinu said its subsidiary Fiinu 2 (formerly known as Fiinu Bank) was struggling to raise the full amount of funding required to exit the mobilisation period and commence operations without restrictions.
At the same time, Fiinu submitted an application to UK regulators to withdraw its restricted banking licence “with the aim of re-applying after a short period of two to three months once exit funding had been secured”.
However, in an operational and strategic update this week, Fiinu says: “The Company can confirm that the application by its subsidiary to withdraw its restricted banking licence was accepted by the regulators and, due to the continuing challenging market conditions and limited timescale, it has not yet been able to secure the necessary exit funding to consider seeking re-application.”
Walking a tightrope
As a result, Fiinu says it has embarked on cost reductions at its subsidiaries through various means including staff redundancies and re-negotiations and/or contract terminations with suppliers. It adds that while scaling back operations may take several months, it will continue to review all options for the business, including trying to source fresh funding that will help it restart its banking licence application.
Other options on the table include a change in strategy or a sale of the group’s technology assets.
Last year, Fiinu had rolled out a first-of-its-kind plugin overdraft, unbundled from a current account. The solution provides access to an overdraft facility without the need to switch banks and current accounts.
Commenting on the update, Chris Sweeney, CEO of Fiinu, says: “It is with deep regret that we have had to scale back operations in Fiinu 2 Limited and Fiinu Holdings Limited, following the successful completion of the technology build of the plugin overdraft.
“The current general capital, and market specific conditions, are increasingly challenging for a business at Fiinu’s current stage of development.”
The firm says as of 30 June, it had unaudited cash resources of approximately £4.3 million available to scale back operations “and continue to meet its financial obligations as they fall due”. It adds it will make any further announcements on its progress “when appropriate”.
