Embedded finance company Railsr raises $24m in funding

Embedded finance pioneer Railsr has today raised another US$24m in funding, little more than a year after closing a Series C round worth almost US$50m.

It comes as the transformation of the business – once known as Railsbank, and now operating under a parent company titled Embedded Finance – continues. Exactly three months ago, it appointed a new CEO in the form of former SETL boss Philippe Morel; and says it is making “positive progress” in addressing regulatory concerns raised in the UK.

It has opted against acquiring Railsbank’s regulated entity in Lithuania and will instead pursue an EMI licence in France, which it intends to passport across all of Europe, either directly or through a network of partners.

The latest injection of funding comes courtesy of D Squared Capital and Moneta Venture Capital.

Funding sets up Railsr to ‘grow sustainably’

Dan Adler, Managing Director of D Squared Capital, says: “We continue to strongly back Embedded Finance as we continue to believe in the fundamentals of the business. It 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.”

The company’s new CEO, Philippe Morel, says: “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.

“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.”

Railsr Chairman Rick Haythornthwaite adds: “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. The company is a core part of the ecosystem for other fintechs and the sector is one of the UK’s key growth areas. It is set to play an important part in ensuring the UK remains a leading fintech hub.”

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