I hope Monzo doesn’t get acquired. I try to do as little business with traditional banks as possible.
It’s great watching Monzo and other newcomers succeed in the market.
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The problem is that they are not succeeding - hence this topic. I hope they succeed for the record.
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I think that’s too difficult a judgement to make. The last financial report did look a bit scary, but a lot has changed since then. The VC firms still backed them, but only at a 40% discount, so I guess that indicates they are doing okay but not smashing it.
I at this point have written off my investment in Monzo - if I make my money back great but I do not expect it.
I consider them an also-ran and the older banks are catching up pretty quickly so these ideas of someone buying them for their tech seem like fantasy to me.
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One thing I’ve just considered regarding the likelihood is that as most Monzo users don’t use Monzo as their sole account - whichever bank acquires them is likely going to reacquire a fair chunk of their own active user base.
Consider Lloyds for example - I think their brands represent 1 in 3 active bank accounts so it’d be pointless for them to acquire a third of their own customers.
For it to be really worthwhile it’d have to be a smaller bank such as TSB or Virgin Money I think - but at Monzo’s inflated valuation it probably wouldn’t be worth it for them. They’d get the tech but they probably could develop it in-house for not billions.
Plus if another bank acquired and integrated Monzo into their own bank then I think a huge number of Monzo account holders would simply stop using Monzo.
I don’t see it being likely unless Monzo really is circling the drain and going for cheap.
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If they ever were acquired I’m not convinced it would be from a legacy bank to get at the technology and it would be more just for the customer base.
I personally think it would be too costly for a legacy bank to even attempt to integrate that kind of technology into their antiquated systems, they’d just find it easier to transfer customers balances to their own platform and shut the app down.
It’s sensible to write off any individual investments in start ups as soon as you make them anyway.
If they come through it’s a bonus, but the success rate is low and unpredictable. Assuming or relying on them coming back is going to lead to disappointment!
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… and regard those investments as essentially donations.
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I believe Monzo’s days are numbered.
I think you’re looking at the wrong direction. If I were A N Other legacy bank looking at acquiring Monzo for their tech stack, I wouldn’t be aiming to integrate it with my old and creaky legacy system. I’d be wanting to use it to replace the legacy - put new customers on the new tech, migrate old customers over over time, and eventually bin off the creaky and just use the shiny new.
Granted, I realise that’s probably easier said than done. But still makes more sense then trying to bolt it on to an existing system, or migrating customers away from the new to the old.
Have I missed something? I don’t recall seeing any news stories recently that would indicate that. Of anything, the opposite, as the new Plus/Premium seems to have had a successful launch and is faring much better than any of the old iterations ever did.
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What is the source for that?
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In the sliding scale of investments, unless you have already maxed out your S&S ISA, got a load of individual shares in public companies, investing in startups probably comes well after that.
I’d suggest that a) the fact that Monzo has released subscriber numbers, and b) it still exists are pointers that it’s doing better than previous versions.
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I don’t think that it still exists is anything to shout about.
Have numbers for Premium been released? They released them for Plus reasonably quickly I think
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I said it was my belief; not that there was any specific news. I’ve based my belief on a number of factors. I may well be wrong, but to me Monzo does not appear to be in a strong position.
I’d not said it was doing any worse. I asked for the source as I have not seen the info officially published anywhere. Not saying it hasn’t been, I’m saying I haven’t seen it.
Subscriber numbers not the be all and end all at the moment. Was there a free trial? Sorry, I don’t recall that.
What’s more important is whether the numbers go up or down over time. Monzo’s success is likely to depend, at least in part, on that.
Monzo quickly announced 50K plus subscribers, and then at the launch of Premium that number had reached 80K. I believe it was @Rika who also mentioned that the uptake was something high street banks could only dream of, which puts into perspective how small the uptake for packaged accounts is on the high street.
They probably could but their biggest hurdle is all of the legacy stuff they’re carrying with them. Having friends that work in a legacy banking group’s tech team, they often comment on how archaic and slow everything is to get out. In the last week, I’ve been subjected to 3 high street banks and it reminded me just how much better fintechs are at doing tech.
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Thanks, Anthony.
Be interesting to see if Monzo can maintain those subscription levels. Hope so, but I think they need another significant income stream.
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Unsure on your meaning for this.
First, I don’t think Apple gives two hoots about Monzo. Sure, Monzo would love such a relationship. Little in it for Apple? They already have a relationship with Barclays.
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If this had to happen, I could see an acquisition by private equity, potentially in combination with the other “hot coral” banks internationally (Up or Xinja in Australia, Bnxt in Spain/Latin America…)
Maybe in partnership with a big tech. Lots of efficiencies, capacity to build a global brand, international transfers become on the table in an easier way… What’s not to like?
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The valuation dropped 40% which is the best indication we’d get that the risk of poor investment returns being much higher. Also the auditors did say that there is material uncertainty that the business will continue as a going concern.
Premium and plus aren’t going to plug a 115m revenue gap. Ultimately it’s a question of whether their VC firms continue to fund them.
No to say that it’s game over, not by a long shot. But the objective indicators show more risk than previous years.
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