In the current economic climate, startups are facing a moment of reckoning. One of the more promising fintech companies, Railsr (formerly known as Railsbank), has announced that it has been acquired by a shareholder consortium and is going into administration. This move allows the company to continue operating as a going concern while it restructures.
The Consortium and Acquisition
The consortium, trading under the name Embedded Finance Ltd, includes previous investors D Squared Capital, Moneta VC, and Venture Capital. The exact value of the deal has not been disclosed, but Railsr was valued at around $250 million in October 2022. This represents a significant decline from its earlier valuation of nearly $1 billion.
Background on Railsr
Railsr is an early mover in the world of embedded finance, which involves fintechs building and running APIs for banking, payment cards, and credit products. These services are used by other fintechs (such as neobanks) as well as brands and businesses that want to offer financial services to their customers.
Statement from Consortium Members
The consortium members have released statements expressing their commitment to supporting Railsr’s customers and navigating the changing regulatory environment. Mo El Husseiny, founder of Ventura Capital, stated: "Macro economic challenges aside, this action means we have successfully stabilised Railsr which operates systemic backbone infrastructure underpinning the UK financial system."
Impact on Operations
Despite being in administration, no services are being interrupted, and two connected operations, Payrnet Limited in the U.K. and UAB Payrnet in Lithuania, are not in administration and will continue to trade as usual.
Related Topics
- Embedded finance
- Fintech
- Railsbank
- Railsr
About Ingrid Lunden
Ingrid is a writer and editor for TechCrunch, covering mobile, digital media, advertising, and the spaces where these intersect. She has worked at paidContent.org and has written freelance articles for various publications.
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