Online savings and investment platform Moneybox announced an interesting appointment this week with news that Laurel Powers-Freeling will join the company as an independent non-executive director.
Powers-Freeling is probably best known as the former head of Marks Spencer’s Financial services.
A business she helped found and launch in 2004. Though that is just one entry on her extensive financial services CV.
Laurel Powers-Freeling will sit on the Moneybox board as its Chairwoman.
The appointment of a well-known city figure to such a senior position is thought to be a precursor to further fundraising and an eventual flotation for the south London based business.
This is the second high profile appointment the company has made in the last year, having previously recruited COO Karen Kerrigan from crowdfunding platform Seedrs in November 2020.
How is Moneybox funded?
Moneybox has some 700,000 customers and is thought to be adding 20,000 new customers per month. The company offers savings and investment products, mortgage advice and pensions.
Accounts can be opened online with as little as £1.00 and clients can access Moneybox services via a dedicated mobile app.
Moneybox has used a combination of crowdfunding and venture capital to raise cash, for example, it raised £30 million in July 2020 in a Series C funding round, that ran parallel to a crowdfunding offer that took in £7.0 million.
That took the company’s total fundraising to more than £51.00 million and won it a place on the rocket list of the 50 fastest-growing London businesses.
Moneybox was founded in 2016 and at the time of its 2020 fundraising was valued at £142.69 million, though despite a rapidly growing its customer base, and funds under administration it has yet to make a profit.
Is Moneybox profitable?
Financial services businesses have a series of high fixed costs that are often related to compliance and regulation.
Online platforms such as Moneybox charge low fees to attract new customers and need to build sufficient critical mass to overcome their high fixed costs.
Something that Moneybox has not yet managed to achieve.
For Moneybox to IPO, the company would probably need to show that it was capable of achieving the required critical mass of clients, or that it could offer higher value, higher-margin services to the customer base in future.
An IPO would be the obvious route to monetising the business for its founder and backers, though following JP Morgan’s acquisition of Nutmeg in June for £1.0 billion, a trade sale cant be ruled out. NatWest snapped up young savers platform Money Rooster for an undisclosed sum just last week.
Larger rivals interactive Investor are also thought to be eyeing an IPO and valuation of around £2.0 billion, if and when they list, which wouldn’t be until 2022 at the earliest.