Bank holiday uncertainty at Manchester fintech Open Money Prolific North
It was a bank holiday of uncertainty for staff at Manchester fintech Open Money after an email, seen by Prolific North, was sent to staff claiming April salaries would remain unpaid with the company placed in a CVA following its sale to new owners.
The email added that Open Money’s subsidiaries, OpenMoney Adviser Services and WorkLife by OpenMoney, were so far unaffected.
Open Money was recently acquired by turnaround specialists Will Mallard and Patrick Leahy, from “financial wellbeing” app Elva, after its main funder and founder, Money Supermarket co-founder Duncan Cameron, pulled funding in March.
The financial advice platform reportedly has around 20,000 clients and £145m under management, but its latest filing with Companies House showed it lost £9.3m pre-tax in 2021 on revenue of £593,000, on top of £7.6m pounds and 582,000 pounds. in 2020. The shareholders’ capital was £28 million.
The email shared with Prolific North, sent to “All Open Money Staff” at 5.23pm on Thursday 27 April, reads: “Topco (OML) will be placed into a CVA (Company Voluntary Administration) – this process will cost some time to effect a turnaround and ensure that the business is viable at the end of that process. However, we can expect that there will be a need for large-scale restructuring of this business. The process will effectively mean that wages for April due tomorrow will not be paid .”
It added: “We are seeking professional and legal advice to protect the position of the company and its employees as much as possible.”
Open Money, originally called evestor, was founded in 2015 by Anthony Morrow, a founder of Tatton Asset Management, and Cameron, who had sold his shares in Money Supermarket in 2007 for a reported £162m.
The partners had reportedly fallen out over the direction of the business, leading Cameron to “abruptly” withdraw his funding “at 4pm the day before last payday [March]” according to the staff email.
Looking ahead, the new owners seem to have faith that the company can succeed, even if redundancies seem inevitable. Open Money said in a separate statement: “[Mallard and Leahy] bought the business with the express intention of growing it. The proposed restructuring, while difficult due to the impact on staff whose roles will be made redundant, is essential for the business to fulfill its potential for fantastic growth.”
Prolific North has contacted Open Money for further comment.
