Investors in Railsr, the prominent British payments group, are closing in on a deal to take over parts of the troubled company amid scrutiny from the City watchdog.
Sky News understands that parts of Railsr’s regulated operations are to be bought by a syndicate of backers which will include a number of Railsr’s existing shareholders.
A pre-pack administration for Railsr’s holding company, revealed by Sky News earlier this week, is expected to take place as soon as Wednesday, according to insiders.
Its travails have put the Financial Conduct Authority on alert for an insolvency process, according to insiders.
Railsr – a banking-as-a-service provider formerly known as Railsbank – was among the companies to snap up assets from the collapsed German group Wirecard.
In recent months it had been in takeover talks with Flutterwave, the African payments technology business, but the negotiations fell apart.
Restructuring experts at Alvarez & Marsal are overseeing the sale and administration processes.
Railsr specialises in so-called embedded finance solutions such as banking services, credit cards and digital wallets.
Its problems have deepened as technology companies have struggled to access sufficient standalone funding to survive.
Railsr itself raised a bridge funding round late last year which was designed to provide enough capital to see it through to a sale.
Last autumn, the company announced the completion of a $46m Series C funding round, although it did not publicly disclose that this took place at a valuation of about $250m – well below that of an earlier fundraising.
That round was led by Anthos Capital, with other investors including Ventura, Outrun Ventures and Visa.
In total, it has raised well over $100m in equity funding since it was set up.
The British company secured a coup last year when it named Rick Haythornthwaite, the former chairman of MasterCard and current chair of Ocado and the AA, as its chairman.
Nigel Verdon, Railsr’s co-founder, had previously claimed that the company is “transforming the finance industry in the same way that Apple did to the music industry when they created iTunes”.
Railsr declined to comment.