WeSwap rescued from administration following Blackthorn deal

After becoming a victim of the global collapse in travel, currency exchange firm WeSwap has been saved from administration. The sale to rival Blackthorn Finance Group was orchestrated by restructuring consultancy Opus.

Founded in 2014, WeSwap was an organisation offering consumers competitive exchange rates, when travelling abroad. The company allows users to buy and sell currency directly with each other instead of using a bank. WeSwap also had a loadable card and app, which travellers could use to avoid having to change and carry foreign cash – and was reasonably successful in its early phases.

WeSwap won the Innovation in Travel Award and Best Travel Money Provider at the British Bank Awards, and even counted tennis champion Andy Murray and serial entrepreneur Alex Chesterman among its backers. However, when Covid-19 struck, WeSwap was hit extremely hard by the lack of business and leisure travel during the global pandemic.

Having been used by 500,000 people every year before the coronavirus crisis, the London based company suffered a torrid 18 months, as it was stung by internal restrictions relating to lockdown. Amid the pandemic, the start-up slashed its costs by 40% in 2020, cutting its workforce by one-fifth, however it was not enough to weather the storm.

Problems became increasingly pronounced, and in September 2021, UK newspaper The Telegraph reported that a botched systems upgrade led to money seemingly “disappearing” from holidaymakers’ accounts. The disappearances arose from WeSwap looking to transfer cash to a new mobile app-based management system, but a botched migration meant when it closed down its online accounts on and cancelled all customers’ cards, the transfer did not occur.

Following months of hardship and mishap, WeSwap fell into administration, with Allister Manson and Steven Parker of Opus Restructuring & Insolvency as installed as joint administrators. They have since secured a sale to rival Blackthorn Finance Group. The pre-pack deal means customer service has not been affected, while the firm’s remaining jobs have been preserved.

“We are absolutely delighted to announce the sale of WeSwap’s business to Blackthorn.  After an extremely challenging period for the whole travel sector due to Covid-19, I’m thrilled that WeSwap’s customers will continue to be able to use their cards, that we haven’t needed to make a single redundancy and that the WeSwap name will still be part of the UK’s exciting fintech landscape,” noted Allister Manson, Head of Technology at Opus Restructuring & Insolvency.

Pre-pack agreements typically allow collapsed firms to be sold on without their liabilities. While this can help preserve jobs, it often leaves creditors such as landlords and suppliers nursing financial losses. This pre-pack deal is expected to leave investors more than £20 million out of pocket.