Monese acquired by Pockit as HSBC writes off its investment

FinTech Monese has been bailed out by Cardiff-based digital banking provider Pockit after HSBC became the latest investor to write off its investment in the struggling London company.

The takeover comes after Monese failed to raise new funds and pre-tax losses of £30.5m in 2022, despite revenues rising 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 exceed $1 billion. However, it has lagged behind competitors such as Revolut, Monzo, and Starling Bank. HSBC’s $35 million investment in 2021 as part of a strategic partnership was recently written off, leaving Moniz in need of a bailout.

Pockit, which serves 900,000 customers “underserved” by traditional banks, has acquired Monese Bank, creating a combined customer base of around 3 million people and generating nearly £30 million in annual revenue. Pockit will leverage Monese’s regulatory infrastructure and product offerings, enabling it to accelerate new services such as multi-currency accounts.

The deal, which is awaiting FCA approval, will involve a capital injection of up to £15m from Pockit shareholders, led by Puma Growth Partners, to fund integration and future growth. Financial terms of the acquisition remain undisclosed.

Pockit CEO Virraj Jatania will lead the expanded business, with Monese founder Norris Koppel remaining involved to ensure a smooth transition. The two companies’ services will continue independently for the time being, with a careful review process planned.

“This is a transformative acquisition for Phuket,” said Jatania. “It immediately catapults us to a scale where we can support financial inclusion for a critical mass of people underserved by mainstream finance. Over time, this deal will provide new products and an enhanced in-app experience.”

“This new era with Pockit is a great way to build on our success,” Koppel added. “The two companies are highly complementary in terms of products and geographic footprint, and we look forward to the next chapter.”