HSBC has written off its holding in British fintech Monese just two years after investing $35m in the lossmaking Revolut rival once hailed as a potential “unicorn”.
The banking giant “completely impaired” its remaining $5.86m stake in the nine-year-old company in March and April, according to filings for HSBC’s investment arm.
HSBC acquired its minority holding in Monese in 2022 as part of a strategic partnership focusing on its banking-as-a-service (BaaS) platform.
Monese has embarked on a restructuring and breakup after warning in January that its future was in question amid struggles to secure further funding.
Its BaaS platform has become a standalone business called XYB, while Monese’s consumer banking unit is reportedly set to be sold to Pockit, a UK fintech focused on the financially underserved.
HSBC declined to comment on the writedown. Corporate filings show HSBC had a 5.4 per cent stake in Monese. Monese has been approached for comment.
The move comes after one of Monese’s biggest investors, Sweden’s Kinnevik, also wrote off its stake at the end of last year, arguing that while there was “still significant value in the company”, its future was uncertain.
Monese’s other backers have included PayPal, Augmentum Fintech and International Consolidated Airlines.
Global banks have invested heavily in fintech and launched their own products in recent years as they look to cash in on the fast-growing sector while fending off future rivals.
HSBC now competes directly with Wise and Revolut through Zing, an international payments app it launched in January. However, its experience with Monese underscores risks in the fintech space.
Recent failures include Barclays’ payments app PingIt, Santander’s SME-focused Asto and RBS’ digital bank Bó, which it launched in 2019 to challenge Revolut and Monzo but axed after just five months.
Founded in 2015, Monese was the UK’s first mobile-only app-based bank but was soon overtaken by the likes of Revolut, Monzo and Starling.
Monese’s latest accounts showed pretax losses widened to £30.5m in 2022, from £18.7m in 2021. Administrative expenses rose to £31.3m from £18.5m, offsetting a 58 per cent jump in revenue to £27.7m.
It emerged in 2020 that Monese had been in talks with investors to raise £100m in a deal set to make it a “unicorn” valued at more than £1bn.