Annual Report 2020

Curious by the isa comment

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Just so you’re aware, Monzo is a privately owned company. Nobody can “swoop in” and aquire them.

Anything privately owned has to up for sale, for it to be sold.

Also, Monzo just raised £60m of additional capital last month from private investors.

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I am aware.

When you get desperate and can’t pay your staff, the board may be given little choice. The additional capital raised will only last so long, and it was raised at a lower valuation.

Hmm, I’m not sure I can see any desperation. Can you?

That sort of sentiment can be taken with any startup, no? Losses are expected before a startup is profitable, and each startups runway is only so long.

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Not yet, and I hope they will be fine. They are undoubtedly in a for some difficult months and I wouldn’t dismiss the idea of a legacy bank making an offer, particularly if they struggle with fundraising. For example, Ratesetter - a loss making ‘fintech’ P2P lender has been massively hit by Coronavirus, and likely realised it couldn’t raise any further capital - is now in exclusive acquisition discussions with Metro Bank (who could benefit from their loan book). I imagine the larger legacy banks have similarly been keeping an eye on Monzo for a while, and hoping for a moment like this, where Monzo may have little choice in the matter if it wants to survive.

Hope I’m wrong - as I would much rather see Monzo independent!

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My annual whinge: can we have web/HTML format as default - or at least alongside PDF?

PDF is just inaccessible and really rubbish on mobile.

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Why have salaries gone from £19m (2019) to £54m (2020)?
Number of staff has doubled, but salary cost is almost 3x?
Page 109

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When it comes to a competitive market such as engineering you need to pay good if you want to attract and retain good talent so I guess that could be it?

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Could it be that staff got performance-related pay increases as Monzo grew as well?

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Bleurg, is this anything to genuinely worry about? I’ve been full Monzo for years, salary going in and all my outgoings are paid from there and our joint accounts. I love them, would be so gutted if I had to go elsewhere.

If something did go wrong, would we get notice to pull everything out/do a CASS process?

Have visions of it being like when places go bust and people turn up to work still and find a sign on the door saying it’s gone into administration, go home, shop is all shut up.

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Yeah, it’s a bit rubbish, it could very quickly and easily turn into a northern rock styled disaster. :frowning:

The biggest thing to worry about, as I see it personally, would be for a sufficient number of active customers to decide that there is something to worry about and so cause some of what they are worried about by withdrawing their business

The best way for us to support Monzo, in a non-fanboy way before someone weighs in, is just to keep using them as normal for spending and saving

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Just as well they already have Gary Hoffman to hand then

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Indeed. I’m not worried that Monzo will do something catastrophically stupid and mess up their business. I am worried that the numbnuts rumour mill could end up with people creating the problem they’re worried about by causing a virtual run on the bank (and I call it numbnuts because when you’re worried about your windows being smashed by a bag of hammers, you don’t go out and smash your windows with a bag of hammers (to use an absurd analogy)).

I’ll keep on using Monzo like I always have done for the past few years now. And I’ll be hoping that there won’t be too many people who use Monzo as a spending account and decide that actually they’ll take their £1k balance back out to their old account and leave £10 in Monzo instead.

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I mean, the average person is going to read ‘going concern’ in news stories that will inevitably come out shortly and get pretty damn worried I would imagine.

Not thinking of changing how I use Monzo etc, but thinking of the what ifs.

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Monzo has already been approached numerous times and with 4 million customers with over a billion in deposits, they are attractive. The current account is technically profitable without Monzo Plus so any buyer would just cull everything which costs excess money. Even Northern Rock was sold on after its failures.

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The 67.2M revenue figure is missleading and imho should be removed from the report. As per pages 92, 106 onwards, the Net Operating Income is 35.658M or £9.14 per customer.

Yet Net Operating Expenses are £38.71 per customer.

To get to break even one has to quadruple customers without spending any extra money on staff or anything.

Or get more money from customer.

The current edition of Plus looks like it might be £30 Net per customer. Which is quite good. But it feels like premium version would have to be even more. At this point I would expect premium to be marketed at £15 per month if not higher to customer.

Drop the free tier, after premium plus launches?!

One could also boost 1.5x interchange fees if Monzo had a credit card, instead of or in addition to debit card. Rich data, no FX charges, is enough for me to use Monzo credit card for monthly spending.

Bunq did the above two things - higher interchange fee credit card for “travel”, and effectively paid tiers only. Cut out lots of non revenue customers, whilst improving income & expenses.

It feels like one should charge for the first card issue too.

US is a massive drag. Abandon?

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I keep feeling they will spin off Monzo USA at some point to raise money or pay off investors. The report states it will continue to be developed independently from the UK app and thus (in my opinion) quite easy to sell off in the future.

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This isn’t the best news, however I’ve been with Monzo since mondo and always stuck with, right now I have my salary paid in and all my direct debits go out so now. I am also on Plus too! So no complaints from me. I think like a few others have said some people may make ‘rash’ decisions and just up sticks and leave Monzo which of course wouldn’t be great. The press are gonna feed off this and ultimately could turn some people off Monzo.

I’m sticking with them, after all our money is safe. If Monzo works for you then just continue as normal, if it doesn’t then go back to legacy banks :wave:

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I really don’t think this report is as bad as some are making out. It’s better than I was expecting.

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