After numerous reports of trouble at banking as as a service fintech Railsr, the company has finally been sold to new investors.
Railsr, a UK fintech company facing a number of issues and on the brink of collapse, has been sold to a consortium of investors.
The company, known as Rails Bank until the summer of last year, has officially been bought by Embedded Finance LTD, a legal entity backed by three investors D Squared Capital, Moneta VC and Ventura Capital.
The deal draws to close several months of uncertainty for the UK fintech scale up, which just one year ago was chasing a £1bn 'unicorn' valuation.
Railsr has been the subject of speculation since the start of the year when AltFi reported on a number of pressing issues at the firm including a fresh round of layoffs in the US insider allege funding issues and a sale to Nigerian fintech.
Read More: Trouble at Railsr: New layoffs, insiders allege funding issues and sale to Nigerian fintech
Staff members and customers told AltFi the company faced an acute cash flow issue in the second half of 2022 despite a reported $46m Series C funding round announced last October.
Railsr's new owners are led by D Squared Capital, an investment vehicle incorporated in 2020.
Dan Adler, Managing Director, D Squared Capital, said regarding the deal: "Embedded finance has the potential to spur innovation, shape business models and shift consumer experiences. Railsr has the opportunity to maintain its position as the market leader in Europe and capture the ever-burgeoning embedded finance market opportunity. We're delighted to play a role in this pivotal moment for the company and its customers."
As part of the sale to the consortium, Railsbank Technology Limited will be placed in administration. All assets will now be transferred to the new entity Embedded Finance Limited’), which will operate the platform going forward.
Rick Haythornthwaite, Chair of Railsr's board, said: "We are absolutely delighted that Railsr is now able to rebuild momentum and return to growth. It is a business that deserved to be recapitalised. Railsr has a best-in-class technology platform that has already given hundreds of fintech customers competitive advantage. A huge number of people across the financial ecosystem believe in Railr's potential and have worked very hard to make this transaction a reality. We will now get back to basics and manage the business methodically and constructively. We have secured a new chapter for Railsr and are excited about what the future holds."
Haythornthwaite will remain as Chair of the Board of Railsr.
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