Insolvency may sell Railsbank Technology. Directors are close to selling the UK-based FinTech business via a “pre-pack administration,” a kind of bankruptcy in which a bidder is pre-selected.
In an email to Bloomberg, a Railsbank spokeswoman said,
“We are confident that we can find a safe harbor for the firm that will allow Railsr to continue—fully operating and recapitalized. We have made considerable and great progress and continue to explore our M&A process with interested parties.”
According to the study, the firm, which garnered more than $100 million from investors and whose co-founder and CEO declared in 2021 that it was worth approximately $1 billion, has had regulatory and financial issues.
The article stated its regulated U.K. subsidiary is being examined by the Financial Conduct Authority (FCA) and its local arm in Lithuania was banned from taking on new clients last month by the Bank of Lithuania, raising worries about its compliance with AML and terrorist-financing regulations.
According to the article, Railsbank had to repay a $20 million financing facility established in October after the lender became worried about the company’s health.
This week, Railsbank failed to sell itself to a Nigerian FinTech startup.
Railsbank offers digital banking services and was said by its co-founder to be “transforming the finance industry in the same way that Apple did to the music industry when they created iTunes.”
Railsbank introduced a buy now, pay later (BNPL) solution in Germany and the U.K. that allows shops deliver branded and completely integrated payment experiences and offers them “a greater share of the spoils,” according to the company.
