UK fintech firm Pockit reached an acquisition agreement with Monese

The UK fintech firm Pockit, which provides financial services to underserved and low-income customers, recently said that it reached an acquisition agreement with Monese. The struggling mobile banking outfit will soon be acquired by the fintech, although the exact details of the deal were not made public.

Monese Ended Up Struggling After Major Backers Withdrew Support

For the moment, the companies are waiting for the UK financial regulator, the Financial Conduct Authority (FCA), to review the terms they managed to establish and grant its approval before they can proceed. Meanwhile, Pockit and its shareholders, led by Puma Growth Partners, are committing up to £15 million in equity capital to support the integration and future growth of the business.

The deal was made only days after it became public knowledge that HSBC had decided to write off its stake in the struggling mobile banking firm. This move itself came as a surprise, given that it has only been two years since the bank invested $35 million into the mobile banking fintech.

Monese initially went live nearly a decade ago, back in 2015. Based in London and Tallinn, the company started out by targeting immigrants and expats who often struggle to get traditional bank accounts after moving to a different nation.

However, earlier in 2024, the company recorded a £30.5 million loss in accounts filed for 2022. It followed the negative reports with a warning that it is unable to continue operations without raising additional funds. While it did manage to secure more money, HSBC decided to write off its investment, and it wasn’t the only one — another of the firm’s major backers, Sweden’s Kinnevik, decided to do the same.

Pockit Will Benefit Greatly From Acquiring Monese

Now, Monese decided to agree to Pockit’s acquisition terms, as the company decided to add Monese’s business to its own expanding service. Pockit stated that the move will allow it to create the leading fintech for the financially underserved and lower-middle income consumers across the UK and Europe.

The company expects it will be serving around three million customers, and that it will be able to generate nearly £30 million in revenue per year.

The deal will also be beneficial as Monese has a solid regulatory infrastructure, including licenses to handle electronic money and customer credit. On top of that, it has a good geographic footprint, and even good products, such as its multi-currency accounts.

Virraj Jatania, the CEO of Pockit, will lead the enlarged business, while Monese’s own boss, Norris Koppel, will remain at the helm for a while longer, in order to smooth the transition. Jatania also said that this is a transformational acquisition for Pockit and that it will propel the firm to a size where it can support financial inclusion for a critical mass of people.

“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.”