Pockit has successfully acquired Monese, securing its long-term future amidst financial uncertainties.
- Monese had earlier expressed doubts about its ability to raise future funds, highlighting its precarious financial state.
- The acquisition follows a debt agreement where Pockit acted as a lender to Monese.
- Pockit is set to inject up to £15 million in equity capital to aid integration and growth.
- HSBC’s strategic pivot saw it devalue its stake in Monese to zero amidst its own competitive initiatives.
Pockit, a fintech company specialising in banking services for low-income individuals, has announced the acquisition of Monese, a London-based fintech, for an undisclosed amount. This strategic move secures Monese’s future, which had been uncertain due to difficulties in raising future funds.
In September, Monese entered into a debt agreement with Pockit, marking the beginning of a significant relationship between the two fintech companies, where Pockit played the role of lender. This acquisition is further complemented by Pockit’s commitment to infuse up to £15 million in equity capital, aimed at fostering the integration process and facilitating future expansion plans.
Virraj Jatania, the CEO and founder of Pockit, emphasised that this deal positions the company to support a larger number of individuals who are typically excluded from mainstream financial services. He stated that the acquisition “immediately propels us to a size where we can support financial inclusion for a critical mass of people who would otherwise be locked out of mainstream finance.”
Despite challenges, Monese remains resilient with the backing of significant shareholders, including PayPal, HSBC, and British Airways owner IAG. However, Monese’s financials reflect past struggles, with a recorded loss of £30.5 million in 2022, overshadowing its revenue of £27.7 million in the same year. More recently, Monese reported a reduction in losses to single-digit millions for 2023, marking a positive shift in its financial trajectory.
HSBC, once a major stakeholder in Monese with a $35 million investment in 2022, has since revised its strategy. The bank’s latest moves involve devaluing its stake in Monese to zero as it develops its own money transfer application, Zing, a direct competitor in the fintech space. This development highlights HSBC’s strategy shift to enhance its market presence independently.
Additionally, Monese announced plans earlier this year to spin out XYB, its B2B Platform as a Service (PaaS) technology division, to operate as an independent firm, signifying strategic restructuring within the company.
The acquisition by Pockit provides Monese with a stable foundation to navigate its financial challenges effectively.
