Monument Technology, the banking software business in which Monument Bank holds a 49.8% stake, is in talks to raise about £20m in a Series A at a pre-money valuation of roughly £70m. The money is earmarked for international expansion.
Monument Technology sells the core platform behind Monument Bank, the City of London lender built for wealthier savers and borrowers. The software business operates as a separate company and licenses the same technology to other regulated lenders.
Its UK client list already includes Castle Trust Bank and Ecology Building Society, alongside Monument Bank itself. According to a report by Sky News, AlRayan Bank, the UK's largest Islamic bank, is preparing to sign a partnership agreement to run on the platform.
The deal
The company is in discussions with investors over a Series A of around £20m, Sky News reported. The terms under discussion would value the business at approximately £70m before the new money goes in, which implies a post-money valuation of about £90m if the round closes at that size.
The names of prospective investors were not disclosed, and neither was the split between primary and secondary capital.
The cap-table angle
The most important detail for the cap table is who already owns the company. Monument Bank holds 49.8% of Monument Technology, just short of majority control. If the full £20m is raised as new equity at a £70m pre-money valuation and the bank does not take part, its stake would fall to roughly 38.7% on a simple, undiluted basis.
That would put a new outside investor group in a position to own about 22% of the business. Whether Monument Bank follows its money, and whether it keeps any governance rights, will shape how independent the software company becomes. Neither point has been made public.
Use of funds
Chief executive Steve Britain said demand from UK clients was strong and that the Series A would speed up growth and widen the company's international reach. No breakdown of how the money will be spent has been given.
A crowded market
Monument Technology is entering a busy part of the market. Several UK lenders now sell their own internal infrastructure as a service, with OakNorth and Starling among those licensing their software to other banks overseas. Standalone platforms such as 10x, founded by former Barclays chief executive Antony Jenkins, are competing for the same customers.
For a business valued at £70m before the round, adding the UK's largest Islamic bank to its client list gives it a reference customer in a specialist segment of the market.
What's next
Monument Bank is expected to look at a stock market listing in the coming years. How much of Monument Technology it still owns at that point, and what that stake is valued at, will become a bigger part of the bank's own equity story. Terms of the Series A were not finalised at the time of reporting.
Original source: Sky News — https://news.sky.com/story/monument-technology-in-talks-about-20m-funding-round-13608823
