Banking services provider Monese is gearing up to split its business in response to mounting concerns about its financial stability.
The UK-based fintech and banking services firm has engaged Interpath Advisory to facilitate an internal restructuring. This will see its consumer-facing money app and its business-facing Platform-as-a-Service (PaaS) unit, XYB, operate as two distinct entities.
XYB, launched last year, was promoted as a “coreless” banking platform with microservices architecture and eight “foundational engines,” offering a partner ecosystem to deliver 172 services to banks.
Confirming the split with FinTech Futures, Monese acknowledged that its business has evolved in two different directions: the original business-to-consumer (B2C) segment and the newer, rapidly growing business-to-business (B2B) PaaS business.
While Monese is exploring the best organizational and capital structure to maximize shareholder value, it has not disclosed a specific timeline for completing the restructuring.
Despite the lack of an official timeline, looking back on Monese’s journey since its founding in 2015 provides insight into its future plans. In September 2022, the fintech leveraged $208 million in total investment, including a $35 million injection from HSBC. It then provided the XYB solution to HSBC’s international payments app Zing, launched in January.
However, Monese faced financial challenges, posting a $37.6 million loss in 2022, largely due to rising direct costs. CEO Norris Koppel emphasized the company’s reliance on securing sufficient funding for its operations and growth plans. Swedish investment group Kinnevik wrote off its entire investment in Monese a month later, signaling further financial difficulties.
With these challenges, it seems unlikely that Koppel’s pursuit of additional funding will be successful. Therefore, splitting the business to accommodate its diverging operations appears to be a feasible path forward.
Source: fintechfutures.com
