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European Neobank Monese Nabs US$35M From HSBC

By Paul Sawers

The London-based fintech that provides digital banking and remittance services to consumers and businesses across Europe, Monese has raised US$35 million from global banking giant HSBC.

Founded in 2013, Monese is one of several so-called “challenger” banks to emerge from the UK capital, serving customers with a range of online-only services including standard cash accounts, savings and international money transfers. Other notable players in the space include Revolut, which hit a hefty US$33 billion valuation last year; Monzo, which is now valued at US$4.5 billion; Starling Bank, which recently increased its valuation to US$2.9 billion; and Wise, which went public last year and now has a market cap of nearly US$6 billion.

Monese, for its part, now brings its total financing to US$208 million, and follows its US$90 million Series C round last September. And although the company hasn’t divulged any valuations for its latest round of funding, TechCrunch is reliably informed that its valuation has increased “multiple times” on its Series C valuation (which was also undisclosed at the time). It’s also the first tranche of funding in what will eventually be Monese’s Series D round, which will close at some point in the future.

Major coup      

Securing one of the world’s top 10 biggest banks as an investor is a major coup for Monese, and represents something of a trend in recent years whereby dusty-old “traditional” banks have sought inroads to the burgeoning neobank sphere through buying stakes. By way of example, Spain’s BBVA recently invested US$300 million in Brazilian neobank Neon, while JP Morgan bought a 49 per cent tranche of Greece’s Viva Wallet. Elsewhere in the past couple of years, JP Morgan acquired a 40 per cent stake in Brazil’s C6 Bank, Goldman Sachs invested in Starling Bank and Santander backed San Fransisco-based Upgrade.

Indeed, these investments are typically part of a broader strategic play by the banking industry juggernauts, and Monese’s latest tie-up is no different — HSBC is looking to leverage Monese’s banking-as-a-service platform, which it unveiled last year to help other financial institutions easily develop online money management and related digital services. It’s all about bringing the innovation of a fintech startup into a major global bank to help it better compete in an increasingly digital-first world.

“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,” said group head of retail banking and strategy, wealth and personal banking at HSBC, Taylan Turan in a statement. “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.”

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