A series of investors and shareholders are currently contending to acquire Railsr following the firm’s impactation of inflationary pressures.
The British fintech firm has been on an acquisition trail after it was negatively impacted, following its exposure to German payments company Wirecard which filed for insolvency in 2020.
Ever since, the fintech firm has been exploring sales after it concluded a heavily discounted fundraising amid growing pressure.
A report last year revealed that the firm was working with Bankers at FT partners on a range of strategic options, including an outright sale.
Currently, the firm is in talks with suitors about a sale that would take place at a steep discount. African Fintech giant Flutterwave is among those currently seeking to acquire the company.
Also, sources disclose that several other Railsr investors are seeking to acquire the company. An insider at the company disclosed that there is strong competition for the firm’s assets.
Railsr formerly known as Railsbank was founded in London in 2016 by Nigel Verdon and Clive Mitchell and has since expanded across Europe, Australia, SE Asia, and the U.S.
Investors King understands that since its launch in 2016, the Fintech firm has raised over $100m in equity financing and has the backing of leading investors, including Visa.
Additionally, the company is currently a global platform servicing global and regional customers, with offices in the UK (HQ), Europe, US and APAC.
Railsr has been described as the first platform that has gone beyond fintech to enable brands or companies, for example, travel, e-commerce, sports, and retail, to use embedded finance experiences as a strategic tool for customer relationships, revenue, rewards, and relevance.
It also has more than 250 business-to-business (B2B) customers and 5.5 million accounts, with current customers including the likes of Foris, Paceline, Plum, Wirex, and Wagestream. Railsr strategic partner also include Mastercard, Visa, AWS, Plaid, and Salesforce
Kenya Withdraws Financial Impropriety Case Against Flutterwave
Nigerian fintech and African unicorn Flutterwave have been cleared of money laundering allegations leveled against it by the Kenyan Asset Recovery Agency (ARA).
The withdrawal of the charges by a Kenyan high court was verified and revealed by a lawyer representing Flutterwave Robert Gitau.
About seven months ago, Flutterwave had its bank accounts closed following a court order by a Kenyan high court that accused the Fintech giant and some companies of money laundering and card fraud which violated the country’s anti-corruption laws.
Flutterwave alone had its accounts frozen to the tune of $56.7 million (6.7 billion Kenyan Shillings) by Kenya’s asset recovery agency.
According to the court filing, Flutterwave bank accounts operations had suspicious activities where funds could be received from specific foreign entities which raised suspicion. The funds were then transferred to related accounts as opposed to settlements to merchants.
This forced the Central Bank of Kenya to send out a circular to all financial institutions in partnership with Flutterwave to cease working with the fintech firm.
Reacting to the allegations, Flutterwave released a statement stating that such claims were false. The company wrote, “financial improprieties involving the company in Kenta are entirely false, and we have the records to verify things”.
Flutterwave further disclosed that it maintains the highest regulatory standards and is proactive in engagements with regulatory bodies to stay compliant.
Valued at $3 billion in its last funding round, Investors King understands that the fraud and laundering accusations, as well as internal scandals that rocked the Fintech giant, stalled its IPO offering.
This spurred Flutterwave to hire Oneal Bhambani, Ex-America Express as CFO, and also Gurbhej Dhillon, an Ex-Goldman Sachs as CTO, which an analyst believed that such an appointment was necessary as most of the scandals that rocked the firm were financial and an experienced CFO would have prevented or at least controlled it better.
Meanwhile, on January 11, 2023, Investors King reported that Flutterwave is currently in talks to acquire Railsr, a prominent British fintech company, following the impactation of inflationary pressures.
Elon Musk Push Plans For Twitter to Offer Fintech Services
Twitter CEO Elon Musk is currently pushing ahead with his plans for Twitter to offer fintech services, as he seeks to incorporate a payments option on the platform.
This move is suggested to be connected to Musk’s statement after he neared a deal to buy Twitter, in which he disclosed via a Tweet that the platform would be an everything app. He tweeted, “Buying Twitter is an accelerant to creating X, the everything app”.
After he purchased the company, on November 2022, Musk revealed his vision for Twitter to enter the payments market during a live-streamed meeting with Twitter advertisers, hosted on Twitter spaces.
Musk hinted that in the future, users would be able to send money to others on the platform, extract their funds to authenticated bank accounts, and after, perhaps, be offered a high-yield money market account to encourage them to move their cash to Twitter.
Investors King understands that Twitter has already started the process of developing software and applying for regulatory licenses to add a payment component to the platform.
Sources familiar with Twitter’s plan disclosed that the platform has started applying for state licenses after filing to be a payments processor with the U.S. treasury in November.
Few analysts suggest that Musk’s plan to incorporate the payments option on Twitter could be him making a move to restore lost revenue after advertisers on the platform paused their ads over concerns regarding content moderation and free speech policy.
Musk plan to push Twitter into the online payment space could pose a threat to online payment giant Paypal.
Meanwhile, the financial times noted that if eventually Twitter becomes a payments processor, it would face stiff competition from existing apps within that sphere, also noting that it could also expect to contend with high levels of regulatory scrutiny, potentially presenting another level of difficulty for the company.
Macroeconomic Environment Forces Paypal to Trim 7% of Its Global Workforce
In a bid to navigate the challenging macro-economic environment, American payment platform Paypal has revealed plans to trim 7% of its global workforce, approximately 2,000 of its full-time employees.
The company’s recent layoff plan was shared with employees by its president and CEO Dan Schulman, via a memo, stating that the layoff plan was necessitated for Paypal to effectively address the challenging macroeconomic environment, while continuing to invest to meet customers’ needs.
The memo reads in part,
“Over the past year, we made significant progress in strengthening and reshaping our company to address the challenging macroeconomic environment while continuing to invest to meet our customers’ needs.
“While we have made substantial progress in right-sizing our cost structure, and focused our resources on our core strategic priorities, we have more work to do. We must continue to change as our world, our customers, and our competitive landscape evolve.
“Addressing these changes requires us to make hard decisions that will impact some of our colleagues. Today, I’m writing to share the difficult news that we will be reducing our global workforce by approximately 2,000 full-time employees, which is about 7% of our total workforce. These reductions will occur over the coming weeks, with some organizations impacted more than others”.
The CEO further disclosed that laid-off employees will be provided with generous packages, also they will be provided with consultations where required to support their transition.
In the company’s third quarter (Q3) report, Paypal reported net revenue of $6.18 billion, adding 13.3 million net new active accounts, to bring its total active accounts to 416 billion.
It also reported a net income of $1.47 billion, Non-GAAP earnings were $1.11 per share, falling short of Wall Street’s estimated earnings of $1.08 per share on revenue of $6.24 billion.
Paypal’s recent layoff announcement marks the latest round of job cuts in the tech industry as tech most firms in recent times, have laid off a significant amount of their workforce in response to the global economic downturn.
Companies such as Microsoft, Spotify, Salesforce, Amazon, Meta, Google, etc, have all laid off a significant percentage of their workforce.
Investors King understands that more than 58,000 workers in U.S.-based tech companies have been laid off in mass job cuts so far in 2023.
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