Mbanq institutional funding program gets first Swiss private bank investment

Mbanq institutional funding program has received its first investment from an unnamed Swiss private bank, the U.S.-based banking infrastructure company said. The program is built around U.S. dollar-denominated loan participation notes admitted to trading on the Open Market, or Freiverkehr, of the Düsseldorf Stock Exchange and has aggregate capacity of up to $100 million.

Mbanq said the investment supports the expansion of its lending activities and Earned Wage Access platform. The company presents EWA as one of its main growth areas, allowing banks, credit unions, fintechs and enterprise organizations to give employees access to wages they have already earned before their scheduled payday.

The investment is the first under Mbanq’s newly established institutional funding capability. According to the company, the structure is intended to provide a scalable route to funding as demand for its lending and EWA products increases.

What is Mbanq using the funding program for?

Mbanq said the proceeds support portfolio growth across its lending business, including Earned Wage Access and other lending solutions. The company said the program is part of the financial infrastructure it is building so clients can increase use of its lending products.

A loan participation note is the instrument used by the program to raise institutional capital linked to lending exposure. In this case, the notes are denominated in U.S. dollars, carry the ISIN DE000A4MGVH3 and are admitted to trading on Düsseldorf’s Open Market, a less regulated segment than the exchange-regulated market.

Vlad Lounegov, Mbanq’s chief executive, said the first institutional investment marks a milestone for the company and reflects confidence in its longer-term strategy. He said Mbanq is investing in capabilities intended to support clients as demand for Earned Wage Access and lending services grows.

Mbanq was founded in 2016 and says it has been profitable since 2019. The company provides core banking technology, Banking-as-a-Service, Lending-as-a-Service, Compliance-as-a-Service, payments, card issuing and embedded finance infrastructure to banks, credit unions, fintechs and enterprise organizations worldwide.

The notes are issued by Encore Issuances S.A. in respect of its compartment 193, according to Mbanq. Barons Capital Partners SA advised on the transaction, Addleshaw Goddard LLP acted as legal counsel, Chartered Investment Germany GmbH serves as servicer and calculation agent, Baader Bank AG acts as custodian and paying agent, and ICON Asset Management AG is risk monitoring agent.

Mbanq did not name the Swiss private bank or disclose the size of the initial investment. The company also did not provide pricing terms for the notes.

This story draws on original reporting from Finextra Research.