Monese to split business in two amid mounting financial woes
Banking services provider Monese is preparing to split its business in half amid growing concerns surrounding its financial stability.
Monese announces internal restructuring
The UK-based fintech and banking services provider has enlisted Interpath Advisory to assist in the internal restructuring, which will result in its consumer-facing money app and business-facing, Platform-as-a-Service (PaaS) unit XYB operating as two separate companies.
Monese launched XYB last year, and touted the entity as a “coreless” banking platform, sporting microservices architecture, eight “foundational engines” and a partner ecosystem as a means to extend 172 possible services to banks.
Confirming the split with FinTech Futures, the fintech says its business “has developed in two different directions: the original B2C business and now the new and fast growing B2B PaaS business”.
While it states that it’s “exploring the best organisational and capital structure for the company” in an endeavour to “maximise shareholder value”, Monese did not disclose the exact timeline of when the restructuring is due to be completed.
One becomes two
Despite the absence of an official timeline, a look back on Monese’s journey since its founding in 2015 could serve as an indication of how it plans to continue to operate in the future.
It was as recently as September 2022 that the fintech claimed to be leveraging $208 million in total investment, aided at that time by a $35 million capital injection from HSBC. It then provided the XYB solution to HSBC’s international payments app Zing, which launched in January this year.
Yet, Monese was tilting into the red, exemplified by the $37.6 million loss it posted that month for 2022 – a figure the fintech largely attributed to its rising direct costs.
CEO Norris Koppel said at the time that Monese is “reliant on access to sufficient amounts of new funding to finance its current operations and growth plans”, and that should said funding not arrive, “the ability of the group to conduct its operations in their current form will be adversely and potentially severely affected”.
It was delivered a second blow just a month later when Swedish investment group Kinnevik – which had owned a 21% stake in the fintech since 2018 – announced that it had written off “the entire carrying value” of the investment in Monese in an attempt to focus on the “highest-conviction companies” in its portfolio.
With this, it appears that Koppel’s yearning for more funding is unlikely to be satisfied, and that therefore, a feasible route forward would be to appease the “two different directions” in which its operations are naturally heading.
