What happened: British Railsr was one of the poster children of the banking-as-a-service boom over the past years (when it was still called Railsbank). But when the tide turned, the company couldn’t make it, and it ended in a firesale to different investors. And the story does not end here. Last week, the same investors that bought Railsr acquired Equals Group with the support of two private equity firms (Finextra; Fintech Futures). Equals Group provides an expense management solution, including a card and an international transfer offering primarily targeting businesses. The new owner plans to merge Railsr with Equals Group and aims to create a new service provider targeting different fintech and embedded finance verticals.
My comment: In German, we have the idiom ‘those who are declared dead live longer', which appears to fit perfectly with Railsr. Railsr closed a £24 million funding round earlier this year, so the company was more than just alive. However, the new announcement puts another scale to it. Our reader and podcast guest, Shaul Davids, who worked previously at Railsr, pointed out the possibilities in his LinkedIn post: Equals Group has a payment licence in the EU (Belgium) and a partner bank in the US. Railsr has operated in both markets already but had to pull back. Is this now the chance to re-enter these markets, perhaps even with an improved offering?
This acquisition seems very promising on paper, but many challenges lie ahead. Mergers are never easy, and the banking-as-a-service landscape remains complex. It is also unclear what customer profiles the new company aims to target. That said, Railsr appears to have gotten a new chance to win embedded finance.
