Railsr, formerly known as Railsbank, has been sold to a consortium of global investors.
The change of control of the embedded finance platform has been approved by the United Kingdom’s Financial Conduct Authority (FCA), so Railsr’s customers and end-users will see business continuity, Railsr said in a Thursday (March 9) press release.
“A huge number of people across the financial ecosystem believe in Railsr’s potential and have worked very hard to make this transaction a reality,” Railsr Chair of the Board Rick Haythornthwaite said in the release. “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.”
Railsr — whose co-founder and CEO said in 2021 that it was worth almost $1 billion — has run into problems both regulatory and financial, Bloomberg reported Friday (March 3).
Its regulated U.K. subsidiary is being audited by the FCA, its local unit in Lithuania was stopped from taking on new customers last month by the Bank of Lithuania, and Railsbank had to return money it had borrowed via a $20 million debt facility announced in October after the lender grew concerned about the firm’s stability and demanded the money back, according to the report.
The consortium that has purchased and recapitalized Railsr is called Embedded Finance Limited and is backed by D Squared Capital, Moneta VC and Ventura Capital.
Haythornthwaite will remain as chair of the board, Railsr will stay headquartered in the City of London and the company expects to grow its customer base in the U.K. and Europe, according to the press release.
Railsr is a Principal Visa and Mastercard issuer, provides banking-as-a-service and cards-as-a-service and has a platform designed to meet the needs of each customer, the release said.
“Embedded finance has the potential to spur innovation, shape business models and shift consumer experiences,” D Squared Capital Managing Director Dan Adler said in the release. “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.”
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