A former star of London FinTech once touted as a potential unicorn before being rescued from administration has raised £20 million as it ‘repositions for a return to growth’.

Embedded Finance, trading as Railsr, brought in a new executive team in April after it was acquired by a consortium led by D Squared Capital in a pre-pack administration deal.

The deal, for just £500,000, was a far cry from the $1 billion valuation it once sought in funding negotiations: in October 2022 the company had raised $46m at a $250m valuation.

The firm – once known as Railsbank – has developed APIs which make it easy for developers to integrate banking and card functionality into their products and services. Earlier this year it claimed to have five million end-users.

The new funding comes from existing investors including D Squared Capital and Moneta Venture Capital.

“We continue to strongly back Embedded Finance as we continue to believe in the fundamentals of the business,” said Dan Adler, managing director of D Squared Capital. 

“Embedded Finance is a market leader in the UK and presents significant growth potential in Europe. We are confident about the future of the business, with its highly experienced executive team, leading technology and robust strategy.”

Euan Blair’s Multiverse ‘ditches founding mission’

The company says it has made positive progress in addressing regulatory concerns in the UK over the last six months and is targeting a complete remediation by early next year. 

It has also established an entity in France. 

Philippe Morel (pictured), CEO, said: “With this substantial new investment secured in a much tougher fundraising environment, we are very well placed to grow sustainably. It has been a very challenging period for the sector. 

“Many companies grew too fast, failing to adequately develop internal controls, and then had to scale back quickly in a difficult economic environment.  

“As a UK pioneer, we were one of the first to face these challenges, but we are now also well positioned to be one of the first to come through this period. We have a proven product and business model, which is operating in a sector with much higher barriers to entry due to a tougher regulatory and fundraising environment. 

“We are now best placed to be one of the small group of winners.”

Building My Startup: Rob Illidge, CEO, Vulse