Monzo Bank is About to Become a Unicorn

British Challenger Bank Monzo Set to Join the Exclusive Unicorn Club

22.08.2018 | by Kezia Parkins
Photo by ... on Fabrik Brands
Photo by ... on Fabrik Brands

London-based Monzo is on its way to becoming the UK’s latest FinTech unicorn. With investors such as the VC firm Accel, the round could see Monzo valued at $1.5 billion — marking a four-fold increase over its $336 million valuation in November 2017, according to Business Insider

Monzo is perhaps the most well-known challenger bank operating within the UK. What started as a prepaid top-up card for users to monitor their spending and save fees when travelling abroad has grown into what the company and its employees believe is the bank of the future.

The company was granted a banking license in April 2017 and started offering customers current accounts in October. A whopping 94 percent of its customers made the switch. Just one month later in November 2017, Monzo raised another £71 million, increasing its valuation to £280 million.

“The best way to build a great product is by launching it early and improving it based on feedback from real people.”
Tom Blomfield, CEO, Monzo

A full banking license means up to £85,000 ($108,000) of a customer’s deposits are insured by the UK’s Financial Services Compensation Scheme.

Monzo is one of a number of European neo-banks to have gained a full banking license— but it has struggled to get users to choose it for their primary account.

Digital-Only Bank Monzo
Source: Monzo

The upcoming funding round indicates the bank’s potential to become a successful financial hub for consumers. After working endlessly to become a fully operational bank, Monzo is now showing signs of improved efficiency. Furthermore, Monzo cut the costs of running an active account by 80 percent, from £50 ($64.25) in July 2017 to £15 ($19.67) in June 2018. This could allow the company to continue offering its customers more products and services whilst working toward profitability as a platform.

Monzo’s Growth in User Base
Source: Monzo Community

As the company continues to expand its product suite, Monzo may well succeed in not only pulling more customers into its ecosystem but also getting them to use the platform as their primary financial management portal. 

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Tom Blomfield



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Tom Blomfield


Photo by ... on Wired UK
"The big difference we can make is financial inclusion: making sure anyone can get a bank account, people who’ve been bankrupt, people who’ve come out of prison, refugees. We have something like three or four million unbanked or underbanked adults in this country, and they end up doing things like paying for electricity with coins, paying double what they should. That’s the first step. The second is the world." Tom Blomfield, CEO of Monzo

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