The London-based fintech submitted an offer for the UK arm of Wirecard last night.
Wirecard’s woes first made the headlines back in June when the fintech’s audit uncovered a €1.9bn black hole on its balance sheet, something that former CEO Markus Braun, who was arrested, and subsequently released on bail, for fraud, described as “fraud of considerable proportions.”
But, despite the turmoil, open banking platform Railsbank has given its purchase term sheet to Wirecard UK at, what I’m assuming, will be a heavily discounted fee.
Railsbank was founded in 2016 by Nigel Verdon and Clive Mitchell, who have over 50 years of financial experience combined.
Verdon, who is CEO of Railsbank, also previously founded digital payment processor Currency Cloud in 2007 and remained as a non-executive director as recently as 2017.
In the wake of Wirecard’s demise Verdon, said: “I believe fundamental changes could and should be made in the industry to ensure healthy market growth and stability–something that the Wirecard scandal brought to light.”
Mitchell, who is Railsbank’s Chief of Staff, was a founding partner at Digital Change Partners and, before his foray into the world of finance, was a Lieutenant Commander in the Royal Navy for 13 years.
To date, Railsbank has raised just over $14m, including a $10m Series A in September 2019, so the offer for Wirecard UK is not likely to be anywhere near the billion-dollar valuation the firm’s German parent company once held.
Railsbank has been on an expansion push as of late, officially launching in the US after securing its first American client, Unifimoney, last month.
Railsbank is also a partner on Mastercard’s Fintech Express programme, part of Mastercard Accelerate, which is aimed at helping fintechs to expand across Europe by adding new payment solutions to their products.
The fintech also received a strategic investment from Visa and Global Brain and, at the same time, it signed a 5-year deal with Visa to deliver Banking as a Service (BaaS) to Southeast Asia, becoming a Visa Principle issuing member too.
Currently, Railsbank runs over 50 payment schemes in the UK and, if the sale of Wirecard UK goes through, that number will jump to over 120 customers.
AltFi contacted Railsbank for comment but it is yet to provide one.