Railsr, formerly known as Railsbank, will become the property of a consortium of global investors.
The change of control over the embedded financial platform was approved by the Financial Supervision Authority of the United Kingdom (FCA),. Railsr customers and end users will be able to ensure business continuity. This is stated in the bank’s press release, which was published on March 9.
Railsr Chairman Rick Haythornthwaite said that a huge number of people in the financial ecosystem believe in the bank’s potential and have worked hard to make this belief come true in reality. He also noted that after joining the ownership structure of the consortium of global investors, the financial institution will return to the basics and will manage the business based on methodical and constructive approaches. Rick Haythornthwaite announced the beginning of a new stage in the history of the bank.
In 2021, the cost of a financial institution was almost $1 billion. In early March, the media reported that the bank was faced with problems related to both the financial situation and the difficulties of regulation.
A subsidiary of a financial institution in the UK is being audited by the FCA. Also in February, the Bank of Lithuania banned the local division Railsbank to accept new customers. In connection with the decision of the regulator, the financial institution had to return $ 20 million that was received through a credit line. Back in October last year, the lender doubted the future stability of the bank and announced the possibility of a decision to get the money back.
The consortium that acquired and recapitalized Railsr is called Embedded Finance Limited and is supported by D Squared Capital, Moneta VC, and Ventura Capital.
Rick Haythornthwaite will remain Chairman of the board. Railsr headquarters will continue to be located in London. Despite the difficult situation, the bank expects to increase its customer base in the EU and the UK.
Railsr is the main issuer of Visa and Mastercard. A financial institution provides solutions in the format of Banking as a Service and Cards as a Service. The bank also has a platform designed to meet the needs of customers.
Embedded finance has the potential to drive innovation, shape business models, and change consumer experiences. This opinion is shared by the managing director of D Squared Capital, Dana Adler. He also noted that Railsr has the opportunity to maintain its position as one of the market leaders in Europe and take advantage of the ever-growing opportunities of the embedded financing market.
As we have reported earlier, eBay sold its business in Korea for $3 billion.