Case Study Number 10: Monitise
Monitise provides the specialised technology needed by financial institutions and other businesses to create digital and mobile experiences – enabling them to forge closer relationships with their customers and reduce the demands on internal IT resource. The company was founded by Alastair Lukies and Steve Atkinson who foresaw the potential of using mobile phones for more than just basic messaging and voice communications.
Ariadne Capital was the trusted adviser of Monitise for eight years from 2004 to 2012. During this period, Ariadne Capital assisted in the company’s transformation into a world recognised brand by strategically introducing it to investors, customers, executives, channel partners and the media.
When Ariadne Capital began working with Monitise in November 2004, the company was still part of listed IT firm Morse. The two companies subsequently underwent a demerger in June 2007 a few weeks before Monitise went public on the second market in London, AIM, at 22 cent a share with a market capitalisation of £55.9m. Following its IPO, Monitise successfully scaled its business enabling the company’s market capitalisation to peak at just over £1.3bn in April 2014.
Monitise, at one time, a global leader in mobile money solutions served 1000 financial institutions, was backed by VISA five times and acquired its US competitor, Clairmail in 2012. Their brilliance was to create an economic model for the mobile banking ecosystem, and drive the profitability of the overall sector, by expanding the pie, rather than charging high fees to transfer funds as some traditional firms do. The individual got a lower cost of capital, and the banks and operators were incentivised by getting a cut of each transaction to adopt and drive volumes of transactions through the Monitise platform. This is almost a class case of Ecosystem Economics as Monitise, a Digital Enabler, cut non-tech traditional businesses in on digital revenues that they otherwise would not have secured.
Ariadne’s role has been to support Alastair Lukies, the CEO, in the following ways from 2004 to 2012:
- In 2009, Ariadne advised to focus on the smartphone as a key driver of adoption for mobile banking services, a position that was proven to be true as with the launch of the Nat West iPhone app, the Monitise share price took off
- Help to build the market by being an early believer and communicating the market vision that Alastair had to the media, partners and investors
- Develop the investor base
- Attract partners and influence customer acquisition
- Identify and help secure 2 Board Directors and 2 members of the senior management team
- Scan the market for intelligence and acquisitions
- Nominate Alastair Lukies for the World Economic Forum Technology Pioneer award which was granted to him.
Monitise’s business model is still reliant on partnership with traditional businesses. The company just partnered with Europe’s largest bank Santander and telco operator Telefónica in October 2015. The company now serves 33 million people who account for $101bn payments, purchases and transfers annually in 2015.