Monument Technology is in talks with investors about a Series A round of around £20m that would value the business at roughly £70m on a pre-money basis, according to a report attributed to unnamed sources. The London banking software firm is also preparing to announce a partnership with AlRayan Bank, described in the report as the UKs largest Islamic bank, to use its platform.
The company, which provides banking technology and is 49.8 per cent owned by Monument Bank, has not confirmed the fundraising publicly. Neither the identity of the prospective investors nor the timing of a close has been disclosed.
Chief executive Steve Britain said the business is seeing “strong demand and growth from clients in the UK” and sees a “considerable opportunity globally to redefine banking technology”. He added that the Series A would “further accelerate that growth and expand our global footprint”.
Monument Technology supplies core banking and platform services to a number of smaller lenders and building societies. Its existing clients include Castle Trust Bank and Ecology Building Society, and Monument Bank itself runs on the platform, according to the company.
Market context
The potential fundraising comes as competition intensifies in the banking as a service market. Established banks have been licensing software infrastructure to other lenders, and standalone vendors are seeking to win contracts to replace older banking systems.
Market participants named in the report as active in this space include challenger lenders licensing out technology and specialist platform providers, such as the firm 10X, founded by a former chief executive of a major UK bank. The report suggested Monument Technology is aiming to capitalise on demand from banks and mutuals seeking modern, cloud native systems.
Monument Bank, the London challenger named after the City memorial to the Great Fire, is a near 50 per cent owner of the technology business. The report added that Monument Bank itself is expected to pursue a stock market listing in the coming years, though that prospect has not been confirmed by the bank.
Neither Monument Technology nor Monument Bank has publicly confirmed the details of the reported investor talks. The company has not disclosed terms beyond the figures cited in the report, and the report attributed the AlRayan Bank partnership to unnamed sources.
AlRayan Bank is described in the report as the UKs largest Islamic bank. The exact scope of the proposed relationship with Monument Technology has not been revealed. If concluded, the partnership would add a high profile client to Monument Technologys list of customers and could be presented as a validation of the platform for institutions operating under different regulatory and product models.
Industry observers say banks are under pressure to modernise legacy systems and that demand for cloud based, modular banking platforms has been a feature of the sector for some years. That dynamic has created a market opportunity for companies offering core banking, payments and account services as licences or services to third party lenders.
What happens next will depend on whether talks over the Series A progress to a firm agreement and whether Monument Technology and the other parties choose to make announcements. The report did not disclose a timetable for any fundraising close or for the formal launch of any partnership agreement with AlRayan Bank.
Until Monument Technology or the other organisations involved issue a statement, the figures and the proposed deal should be treated as unconfirmed. The companys chief executive has set out an ambition to grow the business internationally and to accelerate expansion through new capital, but the terms and outcomes of those plans remain subject to the progress of investor discussions and commercial negotiations.
