Monzo Makes First Revenue Following Launch of Investments Function 

One of many UK’s fastest-growing startups, on-line banking big Monzo, has reported its first annual revenue, marking a key milestone within the fintech’s business trip.

Monzo, which has beforehand featured on the Startups 100 Index, posted a pre-tax revenue of £15.4 million for the final monetary yr, after recording a £116 million loss a yr earlier.

Within the final yr, Monzo additionally unveiled its first investing product, and raised virtually £500m in new funding, boosting its total valuation to an estimated £3.9 billion.

From begin to fintech

We listed Monzo as considered one of our hottest new startups again in 2016, only one yr after it was based. On the time, it serviced 200,000 clients.

Eight years later, Monzo has matured. The model’s consumer base now kinds a military of 9.7 million clients, all wielding the agency’s well-known coral-coloured financial institution card.

Consequently, the agency has seen its deposits surge by 88% to £11.2 billion. Income has additionally jumped to £880m.

“In 9 quick years, Monzo has come from nowhere to a place the place one in six UK adults has a Monzo account and we’re now the seventh largest financial institution within the UK by buyer numbers,” Chief Govt Officer TS Anil stated in a press release.

Monzo investments

Reaching the break-even level is likely one of the first indicators {that a} fast-growth startup has turn into a fully-fledged enterprise. However even at scale, Monzo is continuous to innovate.

Final yr, it introduced a brand new funding product with BlackRock Inc., named Monzo Investments. Customers have been in a position to spend money on three completely different multi-asset funds managed by BlackRock straight by the app.

In future, it plans to broaden into pension and mortgages merchandise, to permit customers to trace their spending, saving, and investing in a single place.

The agency can be investing internally. Monzo is presently hiring for 33 startup jobs this June, because it seeks to cement its market presence within the US.

Reportedly, the financial institution’s staffing bills have risen by 47% in the course of the yr as a consequence of this supercharged recruitment drive.

The way forward for fintech?

Monzo’s new worthwhile standing comes amid a more durable funding surroundings for UK fintechs. Decreased investor urge for food noticed funding ranges drop by 37% within the first half of 2023.

Financial troubles have additionally made borrowing extra enticing for Monzo customers. Credit score losses have grown by 75%, as clients lean into Monzo’s overdraft and credit score lending options.

Regardless of this, and its new product launches, Monzo is prioritising revenue alongside scale-up. The model says it has made monetary preparations for unhealthy loans value as much as 10% of its lending guide.

Inspired, cautious traders have now hedged their bets on Monzo. The model raised £340m in March 2024, adopted by an additional £150m final month.

Ben Marrel, a enterprise capital CEO, instructed The Banker that Monzo has turn into a “beacon” that would serve “to reassure VCs who have been beforehand hesitant about investing in daring fintechs”.