There was a bank holiday of uncertainty for staff at Manchester fintech Open Money after an email, seen by Prolific North, was sent to staff claiming that April wages would go unpaid with the company placed into a CVA following its sale to new owners.
The email added that Open Money’s subsidiary businesses, OpenMoney Adviser Services and WorkLife by OpenMoney, were thus far unaffected.
Open Money was recently bought by turnaround specialists Will Mallard and Patrick Leahy, of “financial wellness” app Elva, after its key funder and founder, Money Supermarket co-founder Duncan Cameron, pulled funding in March.
The financial advice platform reportedly has around 20,000 customers and £145m under its management, but its most recent filing at Companies House showed that it lost £9.3m before taxation in 2021 against revenues of £593k, on top of £7.6m and £582k respectively in 2020. Shareholders capital stood at £28m.
The email shared with Prolific North, and sent to “All Open Money Staff” at 5.23pm on Thursday April 27, stated: “The topco (OML) will be placed into a CVA (Company Voluntary Administration) – this process will buy some time to affect a turnaround and ensure that the business is viable at the end of that process. However we can expect large scale restructuring of that business to be needed. The process will in effect mean that salaries for April due tomorrow will not be paid.”
It added: “We are seeking professional and legal advice to protect the position of the company and the staff as much as possible.”
Open Money, originally called evestor, was founded in 2015 by Anthony Morrow, a founding partner of Tatton Asset Management, and Cameron, who had sold his shares in Money Supermarket in 2007 for a reported £162m.
The partners had reportedly fallen out over the direction of the business, leading to Cameron “abruptly” pulling his funding “at 4pm the day before last payday [March]” according to the staff email.
Looking ahead, the new owners appear to have faith that the company can succeed, although redundancies appear inevitable. Open Money said in a separate statement: “[Mallard and Leahy] bought the business with the express intention to grow it. The proposed restructure, while difficult because of the impact on those members of staff whose roles will be made redundant, is essential if the business is to fulfil its potential for stellar growth.”
Prolific North has contacted Open Money for further comment.
