Pockit in Advanced Talks to Acquire Monese's Consumer Banking Arm
British fintech Pockit is negotiating to take over Monese's consumer banking division. The deal involves a nominal purchase price and capital injection, aiming to boost Monese's regulatory capital and finance integration.
In a significant development in the UK's fintech sector, Pockit, a British payments technology company, is in advanced negotiations to acquire the consumer banking arm of Monese, a challenger bank. This potential deal, reported on September 9, 2024, could reshape the landscape of digital banking in the United Kingdom.
The proposed transaction involves Pockit purchasing Monese's consumer division for a nominal sum. Additionally, Pockit plans to inject capital into the acquired business to enhance regulatory capital and facilitate integration. This move comes as challenger banks face increasing challenges in achieving growth and profitability.
Monese, founded in 2015, has over two million customers globally and focuses on serving individuals who struggle to access traditional banking services due to limited credit history. In May 2024, the company split into two separate entities: Monese for consumer banking and XYB for corporate business.
The financial performance of Monese has been under scrutiny. In 2022, the company reported a loss of 30.5 million pounds, a 70% increase from the previous year. This trend reflects the broader difficulties faced by challenger banks in recent years.
"This potential acquisition could be a strategic move for both Pockit and Monese, potentially creating a stronger entity in the competitive fintech landscape."
It's worth noting that Monese's journey has been marked by significant milestones. In early 2020, the company was reportedly valued at over 1 billion pounds. More recently, in September 2022, Monese secured $35 million in funding from HSBC as part of a Series D round.
The talks between Pockit and Monese are at an advanced stage but not yet finalized. There's still a possibility that the deal may not materialize. Interestingly, a previous plan involving Estonian venture capital firm Tera Ventures to spin out Monese's consumer arm as a standalone entity fell through in August 2024.
This potential acquisition highlights the dynamic nature of the fintech industry, where companies constantly seek strategic partnerships and consolidations to strengthen their market position and overcome challenges in growth and profitability.
As the fintech landscape continues to evolve, the outcome of this deal could have significant implications for the future of digital banking in the UK and potentially influence similar moves in the global fintech sector.
