I’m curious to get people’s thoughts on the impact coronavirus will have on the valuation of Monzo.
My broad view is this will have a very negative impact on the valuation & any future funding rounds will likely value Monzo at less (maybe much less) than the ~£2 billion it was valued at after the latest funding round.
Couple this with the impact of WeWorks collapse & the resulting expectation that investors are about to revalue pre-profit companies to be more in line with their multiple’s of revenue. Monzo’s revenue vs. valuation is approx. x133 which I think we can agree seems ludicrous now.
I don’t think there are any parallels between WeWork and Monzo, tbh. WeWork was clearly a scam for anyone that looked at it with a critical mind, and the various ‘valuations’ were essentially made up numbers. Monzo’s future isn’t assured, but it’s a genuine business, and its valuation has been based on that.
From a business model perspective, I agree, there’s no parallel between Monzo & WeWork. Monzo is in a far better position, no question.
Where I do think there’s a parallel is around valuation sentiment, too much cheap money looking for a home & investors pumping money into anything with the word ‘tech’ or ‘AI’ attached to it.
WeWork was revealed as a fraud & subsequently revalued as a office space leasing company. Monzo isn’t a fraud by any means but I do think it will be revalued more in line with a banks valuation.
My opinion would be that the very logic of x million customers = £2 billion valuation will be questioned & that 4/5/6 million customers going forward won’t move the dial that much, if at all
I would agree to an extent. If Monzo were to go public today (even taking coronavirus out of the equation) it would not achieve a £2 billion valuation.
However, I would see a high street bank paying at least £2 billion for it. The long term savings they could make by removing legacy software & subsequent costs would pay for itself in about 10 years.
But Monzo leadership say they will never sell to a big bank so we may never know
Fair, but these “fools” are SoftBank. Their vision fund has turned out to be a laughing stock but I wouldn’t be that confident that similar mistakes haven’t been made across the industry. Maybe not the the extent of SoftBank but mistakes nonetheless
We could be in for an interesting fight between investors & the board. The board would essentially have to way up their fiduciary responsibility to their shareholders with their more idealistic goals.
They may live to regret taking investment from thousands of noisy crowdfunders who will be looking for a pay day.
I work in tech for a large bank. They are nowhere near having a modern stack. All these new features only give a veneer of modernity, it’s lipstick on a pig. Buying something modern & clean would be hugely appealing. Migrating over & all that would be cumbersome & time consuming but it would be worth it, no question.
to be honest the stake that crowdfunders hold is not going to have much, if any influence on the board however loud they shout , the board are some of the main shareholders and will be making decisions on their investment in Monzo
.A lot of people seem to look at it as “they were worth £2bn before the pandemic/VC crunch so now they should be worth a bit (or a lot) less than that”, however that valuation was a relative ice age ago and if you were to draw a graph of their valuation vs user numbers or their valuation vs Revolut (who they have loosely tracked since 2016) you might conclude that Monzo was worth around £4-5bn shortly before the pandemic, and that is what they would probably have been aiming towards in negotiations for the last 6 months.
This was only two months ago and very little has changed in their market landscape. They are still the fastest growing bank and will likely have market dominance just by doing the same thing for 5-10 years. If anything this pandemic will cause everyone to ditch cash altogether and speed up the digital revolution which plays into their hands.
I think they are worth £3-4bn right now and there will be VCs who are not afraid to invest at that level when it comes to the cream of the crop.
As always though, this is all speculation and there is only one way to find out how much they are worth.
Monzo in the media - #1534 by 16bitkieran suggests Monzo may need to borrow money from the govt under unfavorable conditions which says worrying things for the level of working capital it has and would not be not good for existing shareholders
I have no idea , it says you can pay with Monzo , or Go cardless or Metro thats it , nowhere does it suggest Monzo are "going for it ", again I ask you where you got your information that Monzo were applying for it ?
You could actually argue this is very bad news for Monzo’s existing shareholders if it takes part in his scheme
Nevertheless, we have seen posts from Monzo staff expressing the firms priorities re: the need to generate addition revenue and cut costs over the past few months - which from personal experience - happens at startups once they realise future funding is an issue
so we are just guessing then … ? If it takes part , I thought you had some inside information or somewhere you could point to that says Monzo are applying for the scheme
…maybe Im mistaken , where do you think it shows that Monzo need to borrow money from the Government ?