Tungsten positions itself in the SME FinServ market as an eInvoicing firm that can also streamline the process of landing working capital in the hands of its business users. Well, until now.
The company, which acquired Tungsten Bank earlier this year, is reportedly already selling off the operation as it looks to refocus on eInvoicing services.
In an announcement on Wednesday (Dec. 16), the corporation revealed it had reached an agreement to sell the banking arm for more than $45 million, though the company did not disclose the buyer. Reports said the decision followed Chief Executive Rick Hurwitz’s review of the bank’s operations, ultimately finding that it is “incompatible with pursuit of profitable growth from foreseeable invoice financing opportunity.”
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Despite the selloff, Tungsten said that invoice financing will remain an “important component” of its offerings to small business customers.
“We have undertaken a thorough self-assessment of all aspects of our business, which has given us great clarity on the strategic outcomes we desire and the paths we will take to achieve them,” Hurwitz said in a statement. “These outcomes will improve our financial and operating performance, sharpen our focus on profitable business and increase our confidence in forecasting the timing of break-even and organic cash generation.”
He added that the company will refocus on its “core businesses.”
Separate reports said that Hurwitz pointed to regulatory red tape as a major contributor to why Tungsten Bank was more of a burden than an asset to the company.
According to reports, the U.K.’s Prudential Regulatory Authority and the Financial Conduct Authority will first have to approve of the divestiture, which is expected to be completed within a year.