Monese aims to secure fresh funding after recording £30.5m annual loss for 2022
UK fintech Monese is hoping to attract more funding in 2024 after recording a £30.5 million loss over 2022.
Monese records £30.5m loss for 2022, seeks new funding
Its recently published accounts for the year to 31 December 2022 show that Monese generated revenues of £27.7 million, up from £17.6 million the year before. The company attributes this positive increase to “growth in its active customer numbers” primarily in the UK.
However, the increase was offset by its rising direct costs, which “increased significantly” from £17.2 million in 2021 to £26.8 million in 2022, as a result of what the filing says were increased customer volumes and customer acquisition costs.
The company’s administrative expenses also shot up, from £18.5 million in 2021 to £31.3 million in 2022, largely due to the firm further developing its technology platform and expanding its employee headcount, which averaged 349 that year.
Monese ended 2021 with the acquisition of specialist financial services platform Trezeo, followed by the appointment of a new chief product officer in March 2022 and a promising $35 million investment from HSBC Ventures in September, among other developments.
While this latter achievement sustained Monese through 2023, culminating in the launch of its “coreless” banking platform XYB in May, group founder and CEO Norris Koppel says the firm “is reliant on access to sufficient amounts of new funding to finance its current operations and growth plans”.
“The group faces the risk that should such funding not be available, the ability of the group to conduct its operations in their current form will be adversely and potentially severely affected,” Koppel says.
While Monese writes that there is “material uncertainty on the success of raising future fundraising and therefore the going concern status of the company”, Koppel adds that the company’s management believes it will “continue to be successful in obtaining the capital required to meet its future funding needs”.
The future of funding
Speaking to FinTech Futures shortly after its financial results were published, a Monese spokesperson explains: “The directors expect the company will be successful in raising additional funds to implement its strategy; and the external auditors conclude that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.”
The spokesperson adds that Monese “performed strongly in 2023”, attracting “considerably lower” losses.
The reality being faced by Monese now is one it shares with many of its technology contemporaries amid the UK’s increasingly challenging funding landscape.
Cross-border remittance platform Zepz reportedly axed 420 employees, around 26% of its total workforce, in May last year as a means to streamline its operations.
Likewise, UK-based paytech GoCardless was forced to chop 15% of its workforce in the UK, US, Australia and New Zealand in June last year as part of wider plans to cut costs.
For Sharmil Patwa, founder of the UK-based wealthtech business consultancy Opus Una, the industry is “definitely seeing that overall, it is harder to raise capital”, but adds that this “is not an altogether bad thing”.
“Valuations are becoming more realistic which is better for investors and ultimately also for founders, even though some may not wish to believe that,” he tells FinTech Futures.
