Railsr secures future with sale to consortium of investors

Ellie Duncan
10 Mar 2023

Embedded finance platform Railsr has been sold to a consortium of investors led by D Squared Capital, ensuring the business’ future and continuity for its more than five million end users.

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

The change of control has been agreed with the UK’s Financial Conduct Authority and Railsr will remain headquartered in London.

Railsr is the trading name for Embedded Finance Limited, which will now operate Payrnet UK and Payrnet UAB.

Rick Haythornthwaite, who will remain as chair of the board of Railsr, said: “We are absolutely delighted that Railsr is now able to rebuild momentum and return to growth. It is a business that deserved to be recapitalised.

“Railsr has a best-in-class technology platform that has already given hundreds of fintech customers competitive advantage. A huge number of people across the financial ecosystem believe in Railr’s potential and have worked very hard to make this transaction a reality.”

He said: “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.”

In a statement, Railsr acknowledged that its customer base had been “extremely supportive throughout the M&A process” and confirmed that it now expects to be able to grow the customer base in the UK and Europe in the coming months.

Dan Adler, managing director at D Squared Capital, said: “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.”

Ventura Capital founder Mo El Husseiny, added: “Macroeconomic challenges aside, this action means we have successfully stabilised Railsr which operates systemic backbone infrastructure underpinning the UK financial system.

“This is good news for its customers and for the millions of end connected users sitting atop the Railsr platform. Embedded finance is the future and its potential is huge. We are stepping into this future together with our trusted partners.”

In October 2022, Railsr secured $46 million in a Series C funding round, comprising $26 million of equity and $20 million of debt.

The equity portion of the fundraise was led by Anthos Capital, which led the Railsr Series B in July 2021, while other existing investors spanning Europe, the US and Asia also participated, including Ventura, Outrun Ventures, CreditEase and Moneta.