Monzo's annual report (2020), media stories and comparison with other providers

You are right, I missed a zero off in the calculation. It is still a tiny number though in banking terms. It is only two months of salary costs (taken from Annual Report) - and again, we are talking Plus revenue, not profit.

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lets assume 75% are active …of that 3 million lets assume 25% take a plus account thats 750,000 @ £60 a year that’s £45,000,000.

or assume the 4 million figure to be more like 4,465,000 and adjust my figures to be £50,230,000 from plus alone :slight_smile: :man_shrugging:

or assume there is only 25 on the forum that took it thats £1500 a year …now thats tiny numbers …

or assume that all 36000 business account holders are the free accounts which would bring in nothing …

or assume nobody spent anything during lockdown and interchange has become zero

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To assume makes an ass out of u and me

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It is certainly making an ass out of someone above.

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25% taking Plus?!

I bet its 5% at most. If it’s double digits I’ll eat my Plus card.

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well how do we solve this … guess we will have to wait until next annual accounts :slight_smile: but that does take all the fun out of speculation …stringing figures together and coming up with an authoritative figure

I bet its more than 5% :slight_smile:

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Which is why i don’t think they should offer functionality upgrades on the plus account, and should instead focus on the app experience being as good as possible for everyone…

sorry I’m aware I’m sounding like a broken record on this.

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I hear you, I hear you. But a bribe with additional features for ‘free’ is more enticing that having the features for free to start with. And of course, they can’t afford cash bribes.

Are any of you taking into account the goodwill gesture that was offered to former plus customers with those assumptive calculations? :smirk:

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nope, I was just speculating , with absolutely no evidence whatsoever :slight_smile:

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1% at most is my bet. At the moment Plus will only appeal to the diehards.

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your guess is as good as mine Harry :slight_smile: why do you think it only appeals to “the diehards”

It’s a tough spot to be in, but they have time to try a few things before entering administration. They will need to find a path to profitability eventually.

It looks like Revolut is largely taking the premium/metal customer base.
It looks like Starling is largely taking the Business Banking and older/profitable customer base.

Monzo seems to have gone after millennials and the least profitable segments of the market :confused:
Hopefully TS has a plan!

I’m sure he does, it would be detrimental to his future career if he didn’t! I imagine there will be sweeping changes in the coming months.

Entering administration!? I really don’t think that’s likely to happen. In my opinion, in the worst case - long before that happens - Big Tech companies will swoop, and seek to buy them out. Amazon, Apple and Google are toying with fintech ideas, and would be keen to buy up any company that gave them a head start.

Not to mention to incumbent banks. Lloyds Banking Group were once rumoured to have offered £25M for Mondo, and that’s when they only had a few thousand prepaid customers. I bet they or other banks would be willing to pay a great deal more today - even if it were just for their brand or their rapid technical development capability.

I could be wrong, but I don’t think administration is likely.

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Going to stick my neck out and say this is and absurd statement and Monzo will never go into administration.

Best worst case: they’re still a start-up who can trade on future potential to get more VC funding. Probably they could get more from the crowd too, but that is riskier.

Worst worst case: the Monzo name and technology are too valuable to get broken up in administration. Rather, they will be bought out or taken over long before that point. I believe the board, while principled (they’ve rejected takeovers before) are not suicidal. If everything’s crashing down the pan and a legacy bank or big tech company comes along and says “We’ll buy you”, and there’s not better option, I believe the board will reluctantly take it.

But y’know, it’ll only reach that point when things are the lowest of the low, and we’re some fair way off that point. It’s weird how in the rush to bash Monzo many people seem to forget that COVID-19 and really hit the whole sector as well, not just Monzo.

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I really disagree with your points.

VC funding will stop at some point, it’s not going to be available to monzo forever. Their losses are nearly doubling every year and they’ve pretty much launched all their revenue generating products. VC fatigue will become very big if Starling and Revolut are profitable by the end of the year and monzo is losing £114 million a year. Starling are on track to be profitable as per their report today and Revolut haven’t deviated away from their goal of becoming profitable by years end.

I think it’s an absolutely huge stretch to think someone is going to swoop in to acquire a company losing £114 million a year while their two biggest competitors are going from strength to strength and near profitability. Why wouldn’t legacy banks just let monzo fail and get their customers and deposits for free?. They will have to go somewhere if they leave monzo to fail. The annual report has shown monzo may have millions of customers, but they’re largely millennials who are low income customers that don’t drive much revenue. Based on all the press over the last year, glassdoor reviews, and annual report, I don’t think many will be looking to align with the monzo brand.

Again, Covid really hasn’t hit the whole fintech sector; it seems monzo have been completely decimated while the other big fintechs let go a small number of staff or none at all. Starling announced their annual report today and are on track to reach profitability. Revolut are raising money at their current valuation without a down round like monzo. Nubank, N26, Chime Bank, Tide aren’t announcing similar news to monzo.

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Glassdoor klaxon :tada:

Last time I took a look on there, a couple of years back, there were some very wild statements about Anne, so I take little notice I must say

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I think you’re missing the point of how and why such acquisitions take place. Other banks would likely not be interested in acquiring Monzo and running it as a separate loss-making business. They’d want to buy it in order to leverage the very dynamic parts of Monzo’s business that would complement their own shortcomings.

The majority of the big banks struggle to release one app version per month - let alone one per week. That capability is valuable. As is Monzo’s cloud infrastructure, which is far more advanced than their own, which often consists of dozens of interconnecting systems.

Finally, some of the legacy banks have ageing demographics, and would likely be very interested in tapping into a younger base of customers.

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Starling has been mentioned here a lot. With the recent news that they’re close to becoming profitable and they revenue is higher than Monzo’s (if that’s true), how are they doing that with 2x less staff and less funding to date? Maybe Monzo could have achieved the same with 2x less people which would obviously reduce the costs massively