Monese founder says “very pleased” he can focus on just challenger bank after “difficult” time running two businesses

Monese founder Norris Koppel talks trough the decsion to split the London-based business into two.
Monese founder says “very pleased” he can focus on just challenger bank after “difficult” time running two businesses

The founder and CEO of HSBC-backed Monese, a challenger bank-cum- banking tech platform, admits running two differing businesses within one business has been “difficult”.

The London-headquartered fintech announced earlier this month it was splitting the business into two standalone entities: its B2C retail bank Monese and its B2B business XYB.

The move comes amid mounting losses at Monese, which reported losses of £30.5m in 2022, up 70 per cent on the year.

Challenger mobile bank Monese, which launched in 2015, has over two million customers in over 50 countries, and targets customers underserved by mainstream banks.

Monese launched XYB, a banking tech platform which it sells to third parties, last year.

HSBC invested $35m in Monese in 2022, which four years ago was in talks to raise funding at over £1bn. Other investors include Augmentum and Investec.

Until last week, Monese founder and CEO Norris Koppel, an Estonian entrepreneur, presided over both entities.

“Difficult” to shift focus

Koppel said: “It is difficult to shift focus between two businesses constantly, because sometimes one takes the priority, sometimes the other.

“I am very pleased that I am able to put my 100 per cent focus back on Monese now."

Koppel is now CEO of just Monese, but remains a shareholder and board member of XYB. A new CEO of XYB will be announced shortly.

Deliberating best structure

The restructure follows months of executives and investors deliberating how to best structure the business- to make it fit for purpose in 2024 and stem losses.

Did investors want to back the B2B business (which had received most of its recent “attention” and “money”) or its "high burn" and “very capital intense” B2C business? 

Furthermore, there was also the added challenge of disentangling the business given the tech stack runs across both.

What split means?

The split means Monese and XYB will now have separate financing, separate CEOs and “separate missions”.

The split has been backed by two funding rounds, with Tera Ventures, an Estonian VC and an early Monese backer, among those backing the Monese business, which Koppel has previously backed with his own money.

Details of the funding backing XYB are unclear but Koppel says “both companies are now very well financed”.


As part of the split, which must be FCA-approved, it is understood around 65 redundancies were made, cutting the headcount to around 275.

Koppel said: “We have recently gone through restructuring processes as part of this corporate reorganisation, so there have been redundancies in order to accommodate the needs of both businesses.”

The CEO said no “further reductions” were anticipated.

The two businesses will still be run out of a London office, on separate floors.

Advantages of split

A key reason for the split is that it will now allow Monese and XYB, whose clients include Investec, to receive more equal resources.

That XYB has taken up the majority of recent “attention” and “money” of the overall business has been “very challenging” for the business, employees and investors, Koppel admits.

He said: “Our attention has gone into XYB in the past few years, we haven’t really invested in Monese’s growth.

"Having an unregulated technology business inside a regulated environment doesn’t make sense.”

Furthermore, the founder argues the split will benefit his work schedule, giving him more time to focus on the Monese business.

Still collaborating

Monese, which runs on XYB technology, and XYB will continue to cooperate on vendor and client relationships, says Koppel.

A further collaboration point Koppel pointed to is XYB offering broader technology and regulated services through embedded finance, via Monese’s Electronic Money Institution (EMI) licence.

He said: “Imagine there are banks who want XYB’s technology but there may also be some non-banks who would want card issuing capabilities or transactional banking capabilities and this is where the partnership with Monese could be very handy for XYB.”

On Monese’s future financials

In Monese’s latest published financial accounts, it warned of “material uncertainty over the success of raising future fundraising and therefore the going concern status of the company". An invesetor also wrote off its investment in Monese.

Koppel said it is “a bit misleading” to focus on its 2022 accounts.

He says its latest accounts, for 2023, will show reduced losses by around 10-fold, so around the £3m mark.

He says that in 2023, losses were in the low digits and that it “nearly hit profitability” and that Monese will “hit monthly profitability” this year.

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