£24m cash injection to help mobile payments firm accelerate growth
AIM-listed Monitise, which provides mobile payments technology for Visa and most of the UK high street banks, will pass another milestone this Wednesday [29th August 2012] when it raises around £24 million through the placing of up to 81 million new shares. With the pace of mobile payment innovation hotting up and Apple tipped to introduce its own scheme with its new iPhone next month [September 2012], rival contenders need to secure turf now before users of the new technologies get too settled.Google Wallet is nearly a year old while PayPal is already enabling mobile payments via the cloud for 50 million mobile users without the need for a physical phone at the point of purchase.
Its US customers buying goods at designated stores merely enter their mobile number and PIN at a checkout keypad to transfer cash from a bank account or credit card, via the PayPal system.
Retailers, phone ops and card issuers are also rushing to get in on the act with, in the UK, Monitise already boasting £110 million of committed orders plus a further £160 million of additional revenue promised.
Its technology is backed by Visa Inc, the world’s largest credit and debit-card network which currently owns about 9 per cent of the firm.
Meanwhile on Wednesday Visa Europe will increase its holding to about 10 per cent through taking on 45.2 million new shares, making it Monitise’s largest shareholder.
Around 28.1 million shares are also being set aside for other “strategic investors,” possibly Norway’s Norges Bank and private equity firm 3i Group who already have substantial shareholdings.
Meanwhile Monitise, whose full-year 2012 revenues are expected to come in around £34m – more than double of that last year – claims some 16 million people are now using its services, their ranks swollen by a further one million customers every month.
Though the 700-employee company is still losing money due to heavy investment in the new technology along with acquisitions such as Clairmail in the US last month, CEO Alastair Lukies maintains the company is on track to break even this time next year.
The company is also rumoured to be considering a listing on Nasdaq where investors are deemed to be more attracted to newer technologies.
Their appetites were whetted by the estimated $240 billion’s worth of transactions conducted via mobile payments last year  – mainly in the USA – and with the market expected to triple by 2016.