Mobile payments vendor Monitise has raised £109 million via a share placing to investors, including MasterCard, as it shifts from upfront charging to a subscription-based pricing model.

However, the company said the switch to subscriptions will see slowdown in revenue growth in the short term.

It has cut its guidance on revenue growth for the second half of 2014 from 50 per cent to 40 per cent. And it will not hit profitability at the Ebitda level until 2016.

The company has also entered into a commercial partnership with MasterCard. Monitise already numbers credit card rival Visa as a backer.

Two thirds of the new funds will pay for the transition to the new charging model. The remaining one third is earmarked by Monitise for investment in its mobile money platform. FY 2014 capex will be £20 million to £30 million, rising to £30 million-£40 million in FY 2015.

Monitise’s revenue will move away from upfront licence and integration-based contracts and towards a subscription model, which reduces upfront costs for its customers, including banks.

The company said it has a four-year target of 200 million registered end-users, up from about 28 million today. It forecasts ARPU of £2.50 per year for these 200 million users, and that this user-generated revenue will account for 80 per cent of total revenue.

The company priced its placing of 160.6 million new shares at 68 pence each.