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HSBC-backed technology company Monese to break itself up

An HSBC-backed technology company which was in talks to raise funding at a valuation of over £1bn four years ago is to break itself up amid mounting losses. Monese, which has targeted customers who are underserved by mainstream banks, is working with advisers on plans to split itself into separate consumer-facing and corporate businesses.

City sources said that Interpath Advisory had been appointed to work with Monese on the break-up, which they added could lead to a sale or further restructuring at a subsequent time. Monese has about two million customers in more than 30 countries, and employs about 275 people.

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Staff are understood to have been briefed on the plans earlier this month. Led by Norris Koppel, Monese is said to have been attempting to raise additional capital during the last year, and had come under pressure from investors to consider breaking itself up.

Its business-to-business arm, called XYB, reportedly powers HSBC’s retail banking app. HSBC, the London-based banking behemoth, invested $35m in Monese in 2022 in exchange for a stake in the company.

A Monese spokesman said on Friday: “The business has developed in two different directions: the original B2C business and now the new and fast-growing B2B PaaS (Platform as a Service) business. We are exploring the best organizational and capital structure for the company should be to maximize shareholder value.”

In accounts filed earlier this year, Monese referred to “material uncertainty over the success of raising future fundraising and therefore the going concern status of the company”. Its other shareholders include Investec and Augmentum, the London-listed fintech investor.

At the time of its deal with HSBC, it said it had raised a total of more than $200m. A source close to the company insisted, however, that it had begun 2024 on a strong footing following robust performance last year. They said Monese had seen continued revenue growth and losses reducing from £30.5m in 2022 to low single-digit millions. The company is approaching profitability in the near term, they added.

Monese’s break-up plans, which are likely to take months to implement, will come amid a more difficult funding environment for fintechs.

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