FinTech Monese has been saved by Cardiff-based digital banking provider Pockit after HSBC became the latest investor to write off its investment in the struggling London firm.
The acquisition comes after Monese’s failure to raise new funds and pre-tax losses of £30.5 million in 2022, despite revenues climbing to £27.7m.
Founded in 2015 as the UK’s first app-based bank, Monese was once seen as a potential unicorn, with its valuation expected to surpass $1 billion. However, it lagged behind competitors such as Revolut, Monzo, and Starling Bank. HSBC’s $35m investment in 2021 as part of a strategic partnership was written off recently, leaving Monese in need of a rescue.
Pockit, which serves 900,000 customers who are “underserved” by traditional banks, has now acquired Monese, creating a combined customer base of around 3 million people and generating nearly £30m in annual revenue. Pockit will benefit from Monese’s regulatory infrastructure and product offerings, enabling it to accelerate new services like multi-currency accounts.
The deal, pending approval from the FCA, will involve an equity capital injection of up to £15m from Pockit’s shareholders, led by Puma Growth Partners, to fund the integration and future growth. Financial terms of the acquisition remain undisclosed.
Pockit CEO Virraj Jatania will lead the enlarged business, with Monese founder Norris Koppel staying involved to ensure a smooth transition. Both companies’ services will continue independently for now, with a careful review process planned.
“This is a transformational acquisition for Pockit,” said Jatania. “It immediately propels us to a size where we can support financial inclusion for a critical mass of people locked out of mainstream finance. Over time, this deal will bring new products and an enhanced in-app experience.”
Koppel added, “This new era with Pockit is a fantastic way to build on our success. The two businesses are highly complementary in terms of products and geographic footprint, and we’re looking forward to the next chapter.”
