Following the collapse of the German FinTech giant Wirecard, UK rival Railsbank will reportedly buy the company’s British division.
Wirecard imploded in June following the revelations that about $2.1bn of its finances were missing, which led to far-reaching criminal investigations into alleged widespread fraud and the arrest of several top executives at the firm.
German administrators were called in to sell off the company’s assets after Wirecard filed for insolvency in June and now it seems as if they may have found a buyer for Wirecard UK.
Having spoken with sources familiar with the matter, Sifted broke the story that Railsbank has been given a purchase term sheet for the UK division. The deal is set to be finalised in November, but Railsbank did not divulge any amount.
Railsbank was founded in 2016 and is reportedly one of 140 interested buyers of Wirecard UK’s services.
Since it’s launch, UK-headquartered Railsbank has been busy. For instance, it named Singapore-based challenger bank Aspire as its first South-East Asian partner to use its Singapore dollar bank accounts in June and in July it launched in the US. It was reported in April that Railsbank had raised $10m to fund its Asian expansion.
Wirecard UK has faced several challenges since the collapse of its mother company. On Friday June 26, a day after Wirecard filed for insolvency, the Financial Conduct Authority (FCA) ordered the British division to freeze all of its assets and regulated activities.
This caught FinTech ventures like Curve, ANNA Money and Holvi off-guard, forcing them to suspend parts of their services, cutting customers off from accessing their money.
They were able to resume business on Tuesday June 30 after the FCA allowed Wirecard to resume operational activity, following conversations with “Wirecard UK and other authorities” to “ensure that the firm was able to meet certain conditions required to lift the restrictions we imposed on it.”
Companies like Curve and Revolut have said that they are migrating their services away from Wirecard.
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