The deal between Monese and HSBC will see the banking giant take a minority stake in Monese while Monese will help boost HSBC's banking-as-a-service proposition.
Monese has landed a $35m investment from Europe’s largest lender HSBC, as part of a broader deal which will see HSBC take a minority stake in Monese and boost its banking-as-a-service proposition through the fintech.
The deal will see HSBC take a stake in digital banking fintech Monese of less than 10 per cent. It makes HSBC a large investor in Monese, but not the biggest.
To date, Monese, which is based in London and Tallinn, has raised $208m.
Norris Koppel, founder and CEO of Monese, said the investment from HSBC indicated the “strength” of Monese’s platform and “continued appetite from investors”.
Monese, set up in 2013, is an app-based fintech offering current accounts and focuses on customers who struggle to get financial services from mainstream banks.
Its other investors include taxpayers through the Future Fund, Investec, which also holds a stake in Monese, and PayPal Ventures.
Monese said the new funding would support the “continued growth” of its platform while HSBC will plug into Monese’s cloud-based banking-as-a-service business.
HSBC has invested in Monese, which is loss-making, via its Ventures unit, which backs startups.
Taylan Turan, group head of retail banking and strategy, wealth and personal banking at HSBC, said: “HSBC is continually pioneering new wealth and banking innovations for our digitally-savvy customers - we want to help clients make smarter decisions so they can meet their financial goals with innovative digital tools.
“This new partnership is a key step towards helping us deliver digital wealth and banking tools at pace and scale, combining Monese’s fintech credentials with our own global wealth and banking capabilities.”
Catherine Zhou, global head of ventures, digital partnerships and innovation at HSBC Ventures, said “HSBC is excited to invest in Monese as one of the leading fintech players in the market.
“Our investment will provide stronger strategic alignment and enable us to build on our strengths as partners.”
Koppel said: “Securing the support of a tier one global bank demonstrates the strength of our platform and the continued appetite from investors in the platform.
“I am delighted to have such a distinguished partner and investor in HSBC, who brings a great deal of experience in delivering exceptional banking services. We look forward to taking this partnership forward.”
The latest results for Monese for 2020 show it made a loss of £31.1m with revenues of £16.3m.
Last year, Monese agreed to its first takeover, snapping up Trezo, a fintech that offers a subscription-based income-smoothing product for self-employed workers.
Banking-as-a-service is becoming an increasingly hot area in finance and many industry executives expect banking-as-a-service to make a notable impact on finance in the future.
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