Railsr exploring sale despite recent fundraise

The UK-based fintech Railsr is reportedly looking at options to sell its business despite a recent £46m fundraise.

Railsr, an embedded finance fintech, is exploring options to sell its business after hiring advisers FT Partners to help it evaluate options, according to a media report.

A range of ‘strategic options’ are on the table, Sky News reported, with an outright sale included. This also includes raising new cash which would add to its $46m Series C funding round announced last month. 

That round, split between $26m of equity and $20m of debt, came with no valuation for the company disclosed but sources told Sky News Railsr it took place at a valuation substantially below earlier fundraising, at around the $250m level.

Verdon told AltFi in an email message that the round would help the company reach profitability and that the valuation reflected the ongoing difficult investment conditions for growth-focused companies.

“This is a fairly priced raise in a challenging market,” he said.

“That environment has meant that we are focused on all the things that make a really good business: concentrating on our core product and delivering value for our customers. This funding round will take us to profitability and I am absolutely delighted,” he added.

The company, which rebranded from Railsbank in June 2022, helps non-financial services brands launch financial products by ‘embedding’ them through Railsr’ regulated financial infrastructure. 

CEO and co-founder Nigel said in a statement: "The market conditions over the past 12 months are driving market consolidation, as it did in the past when multiple companies came together to build what is today called PayPal.”

"This is just a normal market cycle where everyone is evaluating potential partnerships, and we're no different.”

"We pioneered the highly investable category of embedded finance experiences - which is the next major transition in global financial services."

Verdon previously told AltFi in June shortly after its rebrand that the company would likely more than double its revenues in 2022 revenues to c.£50m. 

However, Verdon said it was also cutting back on its growth ambitions and focusing on existing clients following a round of job cuts in May that saw c.10 per cent of its staff let go.