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UPDATE 1-Greek fintech Viva Wallet gears up for 500 mln euro fundraising -sources

(Adds industry context)

ATHENS/NEW YORK, Aug 14 (Reuters) - Greek payments company Viva Wallet is looking to raise half a billion euros to support its digital banking operations, sources familiar with the plans told Reuters, eight months after securing a banking licence through a merger with Praxia Bank.

The Athens-based company has hired Jefferies to advise on the 500 million euro ($590.15 million) fundraising, which will offer stakes in a new legal entity that will take on all Viva Wallet’s banking loans, the sources said, speaking on condition of anonymity.

“Viva wants to be a neobank without a loan book,” one of the sources said.

Representatives at Viva Wallet and Jefferies declined to comment.

If successful, the deal could provide a template for small start-up banks in Europe to manage their loan books, making it easier for these so-called neobanks to raise money.

Led by Chief Executive Haris Karonis, who secured an e-money licence in 2015, Viva wants to sell loans on its books to a special purpose vehicle (SPV) within 24 hours of finalising them, removing the risk from its balance sheet, one of the sources said.

This new structure shows how financiers in Greece have had to rethink traditional bank funding since the country’s sovereign debt crisis to help to regain the trust of customers and investors alike.

Neobanks have become increasingly popular among investors in Europe, with Germany’s N26 taking its total fundraising to $570 million in May.

Some, however, have struggled amid the economic downturn caused by the pandemic. Britain’s Monzo warned last month that its future was at risk.

Viva offers cloud-based payments services in 23 European countries, providing payment in three currencies, the euro, British pound and Romanian leu.

In January it announced a deal to buy Greece’s first digital challenger, Praxia Bank, which was owned by former Barclays boss Bob Diamond and fellow Atlas Merchant Capital partner David Schamis.

The acquisition of Praxia was cleared by the Bank of Greece in early August, the sources said. ($1 = 0.8477 euros) (Reporting by George Georgiopoulos in Athens and David French in New York Editing by Pamela Barbaglia, Jane Merriman and David Goodman)

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