Monitise gets £49.2 million boost from Santander, Telefonica and IBM

Monitise gets £49.2 million boost from Santander, Telefonica and IBM

Santander, Telefonica and MasterCard are to invest £49.2 million in Monitise, providing a welcome boost to the London-based mobile money outfit after Visa decided to sell off its stake in the company.

Shares in Monitise moved up 14% on the news, as the company re-iterated its guidance to be Ebitda profitable in FY 2016.

In September, Monitise posted a full-year Ebitda loss of £31.4 million, up from £19.3 million in 2013 as it struggled through an overhaul of its business model, ditching big upfront license fees in favour of a subscription-based system. That news coincided with an announcement by Visa that it was contemplating a sale of its 5.5% stake in the firm, causing a 25% plunge in Monitise's share price.

Today's deal is viewed as a significant endorsement of Monitise's strategy as it brings together key stakeholders in the mobile money ecosystem. Under the agreement, the three firms have agreed to subscribe for a total of 161,327,150 new ordinary shares of one pence each at 30.5 pence per share, the closing price per share on 26 November 2014. The new shares represent 8.2% of the existing issued ordinary share capital.

Banco Santander is investing £33 million via its Innoventures fintech fund to acquire approximately five percent in Monitise.

Santander chairman Ana Botín, says: "This investment, coupled with the exciting opportunities we see through the Santander Innoventures Fund to enhance further what we can offer our customers, provides an excellent base from which to build a global digital offering.”

Monitise says the proceeds will be used for business development activities and to bolster the group’s technology and working capital.

Commercially, it also provides Monitise with a new pipeline of opportunities via its relationship with Santander and Telefonica, and the prospect of joint development work with MasterCard on new digital payments services, including mobile remittances, funds transfer and cloud-based deployments.

Alongside this, IBM has agreed to deploy its cognitive computing engine, Watson, in support of Monitise’s new technology platform.

Monitise co-CEO Alastair Lukies says: “There are two clear and distinct approaches appearing in this industry: disruptors looking for control and collaborators working together to share in a very big and sustainable opportunity. With our partners, we are delighted to be playing our role as an enabler to the Mobile Money collaborators. Via deepening partnerships, our increasingly connected mobile commerce services can become even smarter and more engaging for the businesses we work with.”

Comments: (1)

A Finextra member
A Finextra member 27 November, 2014, 11:451 like 1 like

The list of related articles below makes sobering reading and an interesting timeline.  

There is an alternative definition of the word 'Yacht' :   Yacht -  A hole in the water into which money is poured.   I guess you could say that monetise holds a similar position in Mobile banking......  Visa saw one of their ex-Executives join, before bailing out.  

Clearly IBM have no alternative but to go 'all in' .    Santander, MasterCard and Telefonica must see something there!  time will tell if its smoke, mirrors (both) or substance!