The UK’s $ 5 billion Fintech Zepz delayed listing due to account and personnel problems
(Bloomberg) – The British financial technology startup Zepz, mother of WorldRemit, has struggled with its accounts and turnover in its senior ranks before a potential IPO, according to people familiar with the matter.
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Zepz, which helps consumers transfer money across the globe, had planned an IPO that wanted a valuation as high as $ 6 billion (£ 5 billion) as soon as the second quarter, people with knowledge of the case told Bloomberg in February .
The London-based startup struggled to check certain customer accounts on time, said the people, who asked not to be identified because they were not authorized to speak to the press. The problems led to a delay in IPO preparations, according to two people with direct knowledge of the case. The problems have since been resolved, said one of the people.
Zepz had a “robust team of individuals who monitor activity globally to ensure that every transaction on the group’s platforms is carried out ethically and accurately in collaboration with our correspondents,” said a spokeswoman, adding that the claim that the company had accounting problems was “speculative and in fact, incorrect. “
Zepz was founded in 2010 as WorldRemit, and has also suffered from what its former employees describe as a convoluted management structure and high churn among senior executives. The company had four executives with the title of “CEO”, and has had three marketing managers over the past year. WorldRemits Chief Technology Officer and Chief Financial Officer have both left since December.
CEO Breon Corcoran outlined plans in February to cut about 5% of WorldRemit’s workforce, freeze salaries for most employees, reduce the London office and cut the marketing budget by $ 40 million. Corcoran then left the company in June weeks later. A replacement will be announced in the coming weeks.
“The Zepz management shared an internal strategy to reduce our cost base and seek a stronger degree of financial independence, to ensure that we can serve our millions of customers worldwide sustainably and independently of additional external funding,” the spokesman added. that the company had not announced a timeline for an IPO.
WorldRemit was founded by Ismail Ahmed – who arrived in the UK as a refugee from Somalia’s breakaway region of Somaliland – after he became frustrated by the high transaction fees required by other services to send money to his family in East Africa. The company raised nearly $ 300 million in financing at a valuation of $ 5 billion in August from investors including Farallon Capital, Leapfrog, TCV and Accel, making it one of the most valuable UK startups.
About eight months ago, Zepz hired outsiders from the consulting firm Grayce to help the company with the accounts, according to a person familiar with the matter.
“Grayce analysts were on board to support reconciliation efforts,” said a Grayce representative.
The focus for Zepz now is to achieve profitability, given declining investor confidence in loss-making technology startups and IPOs, the people said. Listed companies such as Wise Plc and Remitly Global Inc have seen their shares fall by about 70% since the end of September, as analysts question their exposure to consumer spending and place themselves in an increasingly competitive market.
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