Railsr ‘bouncing back’ with $24m funding injection

Ellie Duncan
27 Oct 2023

UK-based Railsr, the trading name for Embedded Finance Limited, has secured funding of $24 million from existing investors D Squared Capital and Moneta Venture Capital, after a “challenging period”.

Rick Haythornthwaite, chair of Embedded Finance, said that the new funding showed it is “bouncing back”.

The company also revealed that it has made “positive progress in addressing regulatory concerns” in the UK over the past six months and that it is targeting “a complete remediation” by early next year.

In March this year, Railsr was sold to a consortium of investors led by D Squared Capital, securing its future, which had been uncertain.

The following month, Philippe Morel was installed as chief executive officer of the embedded finance platform and was joined by new chief financial officer Debbie Lotz and Nick Charteris, appointed as chief operating officer.

Since then, Embedded Finance has established an entity in France.

In a statement, the company confirmed that it did not acquire Railsbank’s regulated entity in Lithuania, opting instead to initiate the application process for an Electronic Money Institution (EMI) licence in France, which it plans to passport across Europe, either directly or through a network of partners.

Morel said: “With this substantial new investment secured in a much tougher fundraising environment, we are very well placed to grow sustainably. It has been a very challenging period for the sector.

“Many companies grew too fast, failing to adequately develop internal controls, and then had to scale back quickly in a difficult economic environment.”

He added: “As a UK pioneer, we were one of the first to face these challenges, but we are now also well positioned to be one of the first to come through this period.

“We have a proven product and business model, which is operating in a sector with much higher barriers to entry due to a tougher regulatory and fundraising environment. We are now best placed to be one of the small group of winners.”

Haythornthwaite said: “This new funding shows that we are bouncing back. We are now on the front foot, rebuilding momentum quickly, and our strategy gives the company a clear path to return to growth.”

In March, Railsr was purchased and re-capitalised by Embedded Finance Limited, backed by global investors D Squared Capital, Moneta VC and Ventura Capital.

Dan Adler, managing director of D Squared Capital, said: “We continue to strongly back Embedded Finance as we continue to believe in the fundamentals of the business.

“Embedded Finance is a market leader in the UK and presents significant growth potential in Europe. We are confident about the future of the business, with its highly experienced executive team, leading technology and robust strategy.”