Over here, there’s been some conversation about firms that Monzo might acquire / merge with.
I thought that deserved its own topic. I think Monzo has said that it’s open to acquisitions, so what do we think?
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As a starter, I’m thinking about this in three ways:
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Horizontal expansion: acquisition of a bank in another market to give Monzo a foothold there.
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Vertical expansion: acquisition in an existing market (the UK or the US) but for a different product set. For example, acquiring a mortgage or insurance company.
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Buying customers: acquiring a company just for its customer base. For example buying a US fintech and moving all customers to Monzo US.
I really liked the digital recepit company (forgotten their name now) but someone that integrates similar that does digital receipts would be great in my opinion.
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Flux. But for much the same reason they closed down (or at least went B2B) I don’t think we’ll see the return of these//Monzo buying a similar firm because the data is worth more to the retailers so they’ll never release the data.
I was editing as you were typing, sorry about that!
I’m inclined to think buy-up won’t likely happen, I’m not sure there’s much in the UK left that would be worth it, and I’m not sure Monzo are actually big enough elsewhere to do this.
I suspect gradual expansion, trying to keep ahead of Chase and to a lesser extent Starling is probably on the cards.
Not sure what’s going on US wise - they seem to be pushing ahead with development but I’m not sure how much their base is growing. If anything I’m thinking the US is a reverse of what this thread is saying, which is to build and be acquired.
Who in the UK would they buy now?
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Two for one, think Cheddar provides the cashback route that is missing at the mo
You should have asked instead of flagging the post.
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Doh, I forgot category 4, the acquihire!
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They’re building it in partnership, using APIs from a b2b (I think) investment startup.
I think the article that named the company said that Monzo took an equity stake in them. I suspect Monzo will acquire them if the investment product takes off…
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IFTTT 
adding text cos this gives me an error
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It’s somewhere in the Monzo in the Media thread!
It came up the other day. I couldn’t find the original, but a few of us remembered it (unless it was another if those mass hallucinations again).
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Here we go:
The company is Wealth Kernel.
From the article:
In addition, Monzo has held advanced talks with fellow UK fintech Wealth Kernel, a company that provides APIs for trading services, about a potential partnership that would see Monzo provide an equity investment into the startup, according to two London-based sources familiar with the matter. Talks remain ongoing on a deal and no final decision has been made on it yet, one source said.
Monzo and Wealth Kernel declined to comment.
All heavily caveated in the article. Memory’s a strange thing: I remembered it as WK being cited unambiguously as the investment partner and Monzo having definitely bought into them. Obviously not!
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I remember being pretty impressed by what the website was selling at least. If it meets the marketing promise, I can definitely see why Monzo would go for them over Freetrade.
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This looks like a back end service vs the whole deal such as free trade. Could be a smart move if so. Buy it, integrate it and sell it onto other providers as a service.
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The freetrade model is a bit broken, there isn’t money to be made in payment for order flow, hope Monzo don’t go into that
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Freetrade have never tried to make money from PFOF and are on track to break even end of this year. I think now that they’re charging for most accounts they are on a much more solid footing.
I agree though for monzo a better focus would be rebranded investment accounts - they could IMO do well with a simple S&S ISA pot hosted elsewhere under the hood with a slick UI and simple regular investing settings until they’re ready to do it themselves, just as they have done with savings accounts.
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I really liked Flux, even if it wasn’t really featured much in my own account, but the idea of taking a photo of a receipt feels kind of archaic in 2023…
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I might get some slack for this, but Splitwise…
Since bill splitting with people not on Monzo still kinda sucks.
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Maybe an entity like ‘InvestEngine’ which offers GIAs and ISAs based solely on Exchange Traded Funds - a low-cost investment platform, slightly less risky than dabbling in individual companies.
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Acquire some index tracking funds, and then provide them at near cost in the app.
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I wish they would do what starling did - acquire mortgage, loans, credit card books and run those down. Without necessarily migrating them into Monzo systems. As a way to differentiate and use their deposits for lending basically.
Potentially down the line integrate those into Monzo, but that is optional. Existing systems should be ok to operate in a hands off approach.
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