Pockit, a UK fintech focused on providing financial services to low-income and underserved customers, has reached an agreement to acquire the struggling mobile banking company Monese.
Details of the deal, which is pending FCA approval, have not been disclosed. However, Pockit and its shareholders, led by Puma Growth Partners, plan to invest up to £15 million in equity capital to facilitate the integration and future expansion of the business.
This announcement follows the news that HSBC has written off its investment in Monese just two years after contributing $35 million.
Founded in 2015 and based in London and Tallinn, Monese originally aimed to serve expats and immigrants who often face challenges in accessing traditional banking services. Earlier this year, the company reported a £30.5 million loss in its 2022 accounts and indicated potential difficulties in maintaining operations without additional funding. Although it secured some funding shortly after, both HSBC and another significant investor, Sweden’s Kinnevik, have since written off their stakes.
With the acquisition of Monese, Pockit aims to establish itself as a leading fintech provider for financially underserved and lower-middle-income consumers in the UK and Europe, currently serving around three million customers and generating nearly £30 million in annualized run-rate revenue.
Pockit stands to gain from Monese’s regulatory infrastructure, including electronic money and consumer credit licenses, as well as its geographic reach and products, such as multi-currency accounts.
Pockit CEO Virraj Jatania will oversee the combined business, with Monese CEO Norris Koppel remaining onboard temporarily to aid in the transition. Jatania stated, “This is a transformational acquisition for Pockit. It immediately propels us to a size where we can support financial inclusion for a critical mass of people who would otherwise be locked out of mainstream finance. While nothing will change for our 3 million customers in the short term, over time this deal will result in new products and an enhanced in-app money management experience.”