Santander and Monitise Team Up to Launch FinTech Joint Venture

Santander and Monitise make a joint venture agreement with the aim of launching a fintech venture builder later this year.

Photo: Banco Santander/Flickr

Photo: Banco Santander/Flickr

Santander, a leading retail and commercial bank, based in Spain, and Monitise, a British mobile-banking software maker, have recently announced a joint venture agreement to launch a fintech venture builder later this year.

The 50:50 joint venture will invest in fintech businesses which will benefit from the opportunity to become partners with the largest bank in the euro zone by market capitalization with a meaningful presence across Europe and Latin America, and with a world leader in mobile money (banking, paying and buying) with proven, scalable technology.

This includes access to Monitise’s new cloud-based platform that is designed to connect banks to digital innovation for their customers. Investee ventures will benefit from Santander’s and Monitise’s business know-how as well as access to Monitise’s design and delivery expertise.

Moreover, Monitise will benefit from a multi-million pound upfront licence fee with further ongoing revenues expected to be generated by the initiative. Besides, Monitise will grow its client portfolio by providing services to the companies the joint venture will support.

Both partners have committed to provide up to a maximum of £10 million of capital each to the joint venture over two years dependent on the scale and nature of opportunities identified.

The joint venture will be led by Julio Faura, Santander’s head of R&D and innovation, and chaired by Monitise founder Alastair Lukies, and will operate from London.

Looking back, in June 2015, Santander InnoVentures, looked into the possibility of using the blockchain technology. As said by Mariano Belinky, head of Santander InnoVentures, during MoneyConf in Belfast on June 15-16 this year, Santander InnoVentures has internally identified 20 to 25 use cases where this technology can be applied.

“We are very excited about distributed ledgers and blockchain technology. They really have the potential to disrupt many of the basic processes we have underlying our transactional products,” she said.

Concerning Monitise, earlier this year Alastair Lukies announced he would be leaving Monitise, following a three-month ‘strategic review’. Fellow co-chief Elizabeth Buse would become the sole CEO of Monitise with Lukies staying on as Founder and Strategic Adviser to her. Besides, the company would focus on sales in Europe, the Middle East and North America, with additional market opportunities being pursued where they directly support partner needs.

A company statement said that the “best way of maximizing long-term value for all stakeholders is to continue transforming and streamlining the business as an independent company” – following “a number of expressions of interest” which did not recognize its long-term value.

Monitise said it expected revenue to be 88 million pounds to 90 million pounds ($137 million to $140 million) for the year ended June 30th, 2015, according to Reuters. The company warned in January this year that revenue would not be as high as expected and its losses would be greater than analysts had expected, blaming changes in its business model.

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