Singapore-based personal finance startup MoneySmart Group rejected a takeover bid from Nasdaq-listed rival MoneyHero on Friday, hours after the latter announced the offer.
MoneyHero, which went public through a Peter Thiel-backed SPAC listing last year, announced on Friday morning a non-binding offer to acquire 100% of MoneySmart that valued the firm at $8 million. The listed company, which operates a personal finance and digital insurance aggregation and comparison platform, said it would pay $8 million in its shares and a potential additional valuation upside in cash contingent on a thorough due diligence process.
MoneyHero referred to a recent capital reduction exercise undertaken by MoneySmart as the basis for the valuation.
According to a March 2024 filing by MoneySmart’s parent company, Catapult Ventures, with Singapore’s Accounting and Corporate Regulatory Authority (ACRA), it had secured board approval to reduce its fully paid share capital by about $11.2 million and pay Japanese firm Kakaku.com about $2 million. The payment was likely for a share buyback as Kakaku, which had owned about 26% of the Southeast Asian firm, exited its cap table in April.
Dismissing the MoneyHero offer on Friday evening, MoneySmart said its board unanimously believed the bid was “neither serious nor credible and that it will not be entertained.”
“The manner in which the offer was made public, with no prior discussions with MoneySmart management, is highly unusual and has not engendered MoneySmart’s confidence in, or openness to, such discussions,” it added.
The company said the proposed deal did not align with its strategic objectives and would not deliver value to its shareholders. It added that specific circumstances drove the transaction referred to by MoneyHero and did not reflect MoneySmart’s market value.
“Our decision was a clear and definitive No,” said MoneySmart founder and CEO Vinod Nair. “The two businesses currently operate in a similar space but are on diverging paths in terms of strategy, financial sustainability and outlook.”
In April, MoneySmart’s legal bid to stop a former employee from joining CAG Regional Singapore, a unit of MoneyHero, based on a non-compete clause was foiled. In its decision, the Singapore High Court said the clause neither protected the firm’s legitimate proprietary interest nor was reasonable and fair.
MoneySmart parent Catapult Ventures was planning to list on the Singapore Exchange via a reverse takeover by Mainboard-listed developer Asia Pacific Strategic, but the agreement was called off in 2023 due to adverse market conditions. The deal, announced in 2022, had valued the combined entity at $161.7 million.
Founded in 2009, MoneySmart offers comparisons of financial products such as credit cards, loans, and insurance. The group also runs an insurance brand, Bubblegum. It reported a profit of $320k in the financial year ended December 31, 2023, on revenue of $35 million.
CEO Nair is the firm’s largest shareholder, followed by Straits Capital (formerly known as SPH Ventures) and Golden Gate Ventures, per DATA VANTAGE.
Its spurned suitor, MoneyHero, operates in Singapore, Hong Kong, Taiwan, and the Philippines. The firm’s brands include MoneyHero, SingSaver, Money101, Moneymax, Seedly, and Creatory. It also owns a stake in Malaysian fintech company Jirnexu.
Since its debut on NASDAQ in November last year, MoneyHero’s stock has been trading below its initial public offering price of $3.35. At the time of publication on Friday, its shares were trading at $1.27, up 1.6% in intraday trading. The firm, whose path to profitability has been delayed due to user growth and market share expansion, has a market cap of around $50 million.
MoneyHero had not responded to an email sent by DealStreetAsia by the time of publication.
