Crowdfunding (Upcoming 2018/19 Round) - Updates


(Sufi) #1

FT writes, Fast-growing bank plans to raise headcount and offer more retail banking services
Published online: November 19, 2017 6:27 pm by Hannah Murphy

https://www.ft.com/content/19c1d3ee-cd3d-11e7-b781-794ce08b24dc

In case you're not able to access FT click here

Banking app Monzo is planning to launch one of the UK’s largest crowdfunding efforts next year to give customers in the fast-growing bank what it calls “a greater share of ownership”.

Tom Blomfield, chief executive, said the start-up, which raised £71m in a private equity fundraising earlier this month, intends to make a further cash call of between £10m and £30m in 2018.

The group wants to expand its 200-strong team to between 300 and 400 people next year to prepare to offer more retail banking services, he told the Financial Times.

However, the main driver of the crowdfunding push would be “to enable the customer base to own part of the bank”, Mr Blomfield said, adding that crowdfunding created a “genuine sense of ownership”.

The challenger bank, which was founded in 2015, offers pre-paid cards that monitor users’ spending to help people to manage their finances. It is now in the process of rolling out current accounts to its half a million customers after receiving a full banking licence in April this year, and aims to close its pre-paid cards business next year. It is among a number of app-based fintech companies such as Revolut, Starling and Atom, that have gained banking licences recently.

Monzo completed a more traditional funding round of £71m earlier this month from existing investors including Passion Capital and a number of new US backers such as Goodwater Capital, Stripe and venture capitalist Michael Moritz, through his charitable investment vehicles. The round valued the company at £280m.

While Monzo did not give an exact date for its crowdfunding launch, the move reflects continued appetite among some growth stage companies for alternative and often lightly-regulated mechanisms for raising capital.

Crowdfunding allows ordinary investors the chance to buy shares in unlisted companies via online platforms. The UK’s largest single crowdfunding to date stands at £19m, raised by brewer and pub chain BrewDog in 2016.

In 2016, UK start-ups raised about £63.3m across more than 17,500 crowdfunding campaigns, according to data from tracking website The Crowdfunding Center. The average raised per project stood at £14,227.

Mr Blomfield said Monzo was preparing a formal prospectus for the latest crowdfunding campaign, in order to comply with EU rules around larger raises using the mechanism. The digital bank has already raised about £4m in total via the crowdfunding route, he added.

The absence of a secondary market has been one of the major downsides to equity crowdfunding to date, with investors being required to hold their shares in a start-up until it lists on the stock market or is bought out.

Mr Blomfield he expected the company to float on the stock market in the next three to five years.

Over time, Monzo plans to provide additional services, from discounts at shops to mortgages offered by third parties. However, it has experienced several operational hiccups in recent months, including system failures.


Next opportunity to crowdfund?
Selling shares in Monzo from crowdfunding round?
(Vivian Lobo ) #2

Yeah, cannot wait to get more information on this. It’s all over the news.


#3

Smart move.

Best way to keep customers loyal is to let them own a piece of their own bank (no matter how small)!!


(Simon B) #4

Cat’s out of the bag then :wink:

I’ve updated the title to Crowdfunding (Upcoming 2018 Round) - Updates so that it’s clear this is the thread to discuss this moving forward!


Share Value
#5

Is there a minimum investment? I would really love to join this but I would feel a little embarrassed if everyone is donating £100’s or even £1000’s and here I come with a miserable £100.


#6

Nearly half of the investors in round 2 earlier this year invested £100 or less (minimum was £10) - so you shouldn’t feel insignificant.

Towards the end of this article Tom talks about what he hopes to one day do for investors who invest £100 in monzo.


#7

What a great article. Thanks for putting my mind at rest. I don’t feel so bad now :slight_smile:


#8

A couple of things.

  1. I dislike the statement Monzo offer a prepaid card … no they don’t, this is now gone and it has no place in any new releases. It’s all current account from now on.
  2. Monzo have suffered a number of system failures … my understanding is these failures were not Monzo system failures but 3rd party financial systems that Monzo have no control over.

(Sufi) #9

Just in the name of transparency, There was a major outage at the end of last month which lasted less than couple of hours Monzo’s own system. Monzo have their own processer for current accounts, they were relaient on 3rd party for prepaid cards


#10

Fair point. But I think it now needs to be made clear that Monzo Bank is not the same animal as Monzo prepaid/just starting out/getting things ready pseudo-Bank.


(Sufi) #11

I agree with this they could also make clear that Monzo does not offer any new perpaid cards…


(Sufi) #12

Monzo has a Share Option Calculator

Use this calculator to work out how much your options are currently worth, and how much they could be worth in the future.
https://options.monzo.com/

Sorry as @MIROW said it’s for Monzo Staff.


#13

The option calculator is only relevant to staff not investors


(Dean) #14

For clarity, do we have any potential idea as to the timing of the next investment round❓ And, whether it will be based on the same format as to previous rounds i.e. pot luck:question: @simonb


(Simon B) #16

Still lots of work to be done. Our next major milestone is shutting down prepaid which is looking to be towards the end of Q1.

Crowdfunding will be after that, hopefully sooner rather than later but to pull off the kind of round that we want to do, is a huge amount of work.

And on that note, if any of you folks know someone qualified to lead this…


Next opportunity to crowdfund?
Next opportunity to crowdfund?
(Simon B) #17

Regarding pot luck, it would be absolutely fantastic if there weren’t a cap on this and everyone who wants to invest is able to do so. Ideally we could do that so there wouldn’t need to be a system. But this is all stuff that needs to be figured out :slightly_smiling_face:


(abdulmajeed alanazi) #18

I can not wait, I want to be part of the smartest bank in the world


(Alan ) #19

Has there been consideration to have an ICO as a crowdfunding event? There are companys with established banking backgrounds gone down this route. There is also 1 company that I know of Neufund who can help facilitate the event. They are going tbrough such an event at present.


(Fateha) #20

Can not wait to finally invest, missed out last time … :sob:


(Tushar) #21

Hey Simon,

I asssume the next round will be on Crowdcube just like your previous rounds. I am Monzo and Crowcube user but did not get an pre-registration mail to record my interest for the previous round. How do I ensure I pre-register for the upcoming 2018 round?