Mondo rival: Revolut announce crowdfunding round

I’m a Mondo investor and also long-time user of similar app, Revolut. Like Mondo, Revolut aim to become an “alternative to bank accounts”. However they’ve started by focusing on the “cheap travel money” niche.

Today they announced they are crowdfunding £1MM of their recent £8MM round. Like Mondo they’re also using Crowdcube — who will hopefully have more server capacity available this time. Unlike the Mondo round, where investors were chosen on a first-come-first-serve basis, it looks like they’re trying to milk this a bit more for marketing purposes by choosing investors based on in-app contacts (see screenshot in linked tweet — sadly I have a long way to go :frowning: )

Investor slide deck
Investor FAQ

Not keen on the inviting people to get the opportunity to invest in something myself. I’m all for inviting people to something but not in that fashion.

Wow, while a lot of my friends have Revolut cards, I certainly wouldn’t spam others just to be given a chance to invest and I certainly wouldn’t want to be spammed by friends to sign up to something for this purpose either. It would be a serious violation of trust.

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Yeah definitely a bit odd, and something I wouldn’t have expected from a banking app where privacy should be more important than usual.

Though I guess with p2p transfers it’s all about the network effect, so they might be trying to channel something like Paypal’s famous growth hack.

Anyway to qualify you just need enough existing Revolut users as contacts on your phone… so if any existing users want to swap phone numbers please send me a message :slight_smile:

Yeh I saw this…I doubt they would shut down crowd cube like :mondo:, but still an interesting proposition. :neutral_face:

The problem is and i agree with you @peterellisjones They want pre-registrants to have Contacts?? I A user is a user. #fail #crowdfund :dizzy_face: BOOO.

:mondo: 4ever :grinning:

Admiring your loyalty!

Personally I think fintech’s the future, but there’s no way of knowing who will be left standing in the new world order at this point — might as well spread out the risk. And as a consumer, competition is always good too. Otherwise we’ll end up back where we started with a small handful of banks with no incentive to innovate.

One thing companies forget is Loyalty is built from openness and ease of communication. especially when it comes to money.:grinning:
If your consumers lose trust you lose business, I think its always great to spread risk. I am a believer in minimising risk but at the same time you bet on the winning horse.

@peterellisjones, do you have a referral code for Revolut (don’t know how that system works) which you might be willing to share? If not does anyone else? I’m looking to try the service out and wonder if that might be helpful! Thanks :slight_smile:

Hi @domtyler, sure here’s my referral code:

At the moment it’s a pre-paid card that lets you keep balances in GBP, USD and EUR and switch easily between currencies. ATM withdrawals in any currency (not just GBP/USD/EUR) are very cheap. For currency conversion they give you the “inter-bank spot rate”, which I think is even cheaper than Mondo’s already very good Mastercard rate. However currently ATM withdrawals are limited to £500 per month, with a 2% fee levied on any withdrawals over that amount.

I’ve been using Revolut while travelling around SE Asia for about 18 months now — no complaints so far.

don’t know if this is ok to post here, but if you are happy please use mine: laichu7sn

And I want to ask, to have contacts doesn’t really mean by inviting new friends right? Do I need to have them in my contact list?

@millkbottlec, it just means having the contacts saved in the contact list on your phone. Revolut knows which users are existing Revolut users by their phone number. You don’t need to invite anyone.

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I would like to see this functionality added to Mondo rather than having to take on another product. I take the point of trying to spread risk by being involved with different projects but would also like to see Mondo taking on the best ideas from other fintech and incorporating it into the overall Mondo offering as well. As a consumer, I already have too many cards and accounts to deal with, I would rather not have another one. I like the idea that Mondo is planning bank status and that these additional features would be a great enhancement alongside the traditional banking features. I would definitely find it useful to be able to hold a USD balance alongside my normal bank account.

@hlarnach Out of interest, why would you want to hold a USD balance (if Mondo continued to offer an exchange rate that’s at or very close to the mid-market spot rate)?

Hi @tristan I can’t speak for @hiarnach, but a good proportion of my expenses are in currencies other than GBP, so having some cash in USD means I’m a bit less exposed to currency fluctuations (I’m looking at you Brexit!).

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(Caveat: I don’t know much about FX!) But we’re talking small amounts here right? This isn’t a long term currency holding that would protect you from fluctuations, even if you could reliably predict those fluctuations? Please correct me if I’m missing something!

Small amounts-ish. Most of my money is in investments — which is easy to hedge because you can just buy foreign funds / shares. But I still need around half a years salary in cash for spending / emergencies since investments can be costly to liquidate. Losing 10% of this due to a Brexit or similar isn’t fun.

Nope! But if you have £20k and split it evenly between USD, GBP when one of those drops 10% you’ve only lost 5% of your spending power in the other currency. The downside is when one rises you don’t profit as much, but the overall effect is less volatility.

Mostly I would find it useful for convenience in keeping track of spending without the uncertainty of the exchange rate at the time the money is used. So certainty of what the balance is and exactly how much will be left once I have transacted. It’s not a showstopper but more of a convenience for budgeting.

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@peterellisjones: so basically, I’m going to France in September, and I’m trying to work out whether it would be more advantageous to use Mondo or Revolut. Obviously Mondo uses the MasterCard exchange rate, which I understand is very good, but Revolut advertise the ‘real interbank exchange rate’. As a layman, would you (or anyone else @tristan ) be able to explain what this means, and which would be better to use? While I understand the idea of spreading risk, I don’t think there is much point my setting up the second account if I can get the same benefits using Mondo, as I will be able to keep all the transactions in one place. Any advice?

I honestly don’t know where the Revolut rate comes from I’m afraid—if it is the ‘real interbank exchange rate’, it probably is slightly better than the MasterCard rate but I wouldn’t imagine it’s much in Euros.

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EDIT: got my maths wrong… Mastercard seems to be even cheaper.

Hi @domtyler I think the Mastercard rate has such small spreads that it doesn’t matter unless you’re dealing with a lot of money.

I just checked Revolut rates in app and I’m getting the same rates reported by Yahoo Finance (the Revolut rate updates in real-time and actually seems to be ahead of Yahoo Finance, which is pretty cool).

For Mondo, I can’t find real-time data for the Mastercard published rates but looking at historical data they seem to charge about 0.025% on top of the mid-market rate for GBP/EUR.

For example for July 13th, the Mastercard currency conversion tool gives:
1.196150 EUR per GBP (when converting from GBP to EUR)
1.1967434218 EUR per GBP (when converting from EUR to GBP)

So (1.1967434218 / 1.196150 - 1) * 100 = 0.05%

This is a spread of 0.05% between buy and sell rates, so we can estimate they’ll charge 0.025% each way.

ie for £1000 Mondo will charge you about 25p and Revolut seems to be about £0 as far as I can tell (could be a bit more as the app doesn’t give enough decimal places to tell, but we’re definitely talking pennies) — either way both are extremely cheap.