UK-based payment technology company Monitise has lost more than a third of its market value after financial services firm Visa revealed that it plans to exit the company to pursue its own development of mobile payment systems.
Visa owns a 5.5% stake in Monitise, first investing in the company in 2009. At one point it owned a 14.4% stake, which it has gradually reduced over time.
Visa said in a statement on Thursday: “Visa intends to continue increasing its investment in its own in-house capabilities and, as a result, reducing its use of external resources.”
Since Visa’s statement, Monitise has seen its share price fall by 35%. Visa has hired JP Morgan Securities to explore options concerning its stake.
Monitise CEO and founder Alastair Lukies said: “When Visa first invested we were a company of around 80 people with revenue of less than £3m ($4.9m) and a primary focus on mobile banking. Today, Monitise is a global, agnostic and interoperable Mobile Money network of unique scale and capability. We are honoured to have our ongoing alliance with Visa as we continue to develop and expand our global network.”
Monitise, which was founded in 2003, allows users to bank, pay and purchase on their mobile devices. The company has over 30 million users and has also partnered with RBS Group and Telefonica Digital.
Visa Europe holds a 6% share of Monitise separately to its US-based parent, worth close to $16m. Visa Europe invested $39.4m in the company in 2011.
In 2010 Monitise raised $53m from investors including the Visa International Service Association and First Eastern Holdings.