Fintech

BT rescues startup to help prep fintech expansion | M&A

BTw#339-monva

BT has done another opportunistic M&A deal to help meet digital recruitment challenges by buying Welsh startup Monva out of administration, TelcoTitans can reveal.

The acquisition, made quietly earlier this year, has seen the Deeside-based business’s team absorbed within BT Digital, the division BT set up in 2021 to drive in-house transformation and develop new high-tech products (BTwatch, #320).

It is understood that Monva Chief Executive Steve Wiley and Chief Technology Officer Simon Dawson have since been working on a service that will support a fresh play by BT in the fintech market.

Both transferred to Digital in May, with Wiley becoming Director, Data & AI Solutions, and Dawson assuming a newly created position as Head of Technology, Fintech at Etc, Digital’s incubation unit (BTwatch, #332 and #337).

The acquisition came in the weeks after Monva entered administration in early-March. BT Chief Digital & Innovation Officer Harmeen Mehta is understood to have sanctioned the deal after meeting — and “loving” — the Monva team.

A BT spokesperson confirmed the transaction’s completion, saying that “we acquired three people and certain assets of Monva Ltd earlier this year, and are integrating their technology and skills into different parts of the business”.

Monva was set up in 2018, with aim to offer consumers a simpler and more intuitive comparison and recommendation offering for financial services and utility products. It gained three rounds of investment during its time in business, with backers including the government-owned Development Bank of Wales. However, it is said to have been badly affected by the pandemic and rise in wholesale energy pricing, limiting its ability to trade on consumers switching to new energy tariffs. Attempts to raise fresh investment, and then sell the business, foundered in early-2022, leading it to call in Quantuma as administrator.

BT’s bid to make bank

Fintech is one of a handful of growth areas being targeted by Mehta, alongside healthcare and drones.

She has a background in the sector, with a current board seat at Lloyds Bank and a past spell at HSBC — and is understood to have been holding discussions with partners that could support BT’s play in the area. The territory is also familiar for Chief Executive Philip Jansen, recruited by BT from Worldpay in 2019.

The operator does not have a significant existing presence in consumer financial services, but will no doubt be looking to tap into its vast pool of telco customer data when it comes to delivering personalised services at scale in the market, and building deeper relationships with economising households during the cost-of-living crisis.

BT also has numerous important B2B relationships in the space, including via BT Global’s financial IT and networking unit BT Radianz. Global’s banking and financial services line made up nearly a third of its revenue in BT’s last fiscal year, to 31 March 2022, delivering £1.04bn (€1.19bn) of its £3.36bn turnover.

Starting over

While BT has not been an active player in corporate venturing for some time, things have been changing as part of Mehta’s innovation agenda.

Buying Monva feeds additional resource into Etc’s Product Factory function, set up this year to enable “rapid” service prototyping, strategy development, and startup investments and partnerships — all with the aim of delivering new applications and services more quickly.

The Digital division has indicated in recent months that it is looking to acquire or invest in multiple startups, to gain intellectual property and talent, and in February bought a minority stake in developer hiring platform Distributed in a £30m transaction (BTwatch, #333).

Leading the partnerships programme is Meg Blight, Director of Startup Growth at Digital.

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