Monzo crowdfunding


#1

So simonb over on the Monzo community site has given a tantalising response to the question “when is the next funding round?”

Simonb response: “not yet, but soon”

So what do we think this could mean? Another Crowdcube raise, an ipo? As a broker does Freetrade get wind of these things first?

Finally anyone looking to invest when they do raise? How much growth do we think they have ahead, any guesses on current valuation?


#2

I’d definitely invest but know it would be highly oversubscribed and a bit of a lottery as to whether I’d get any allocation. I’d love it if they prioritised new crowdfund investors over existing ones.

No idea of a meaningful valuation but, given Monzo is still in growth mode and far from achieving its ambitions, there is still plenty of potential upside.

“soon”… if this means this year then :fire:


(Chris) #3

I’d love to invest and was bitterly disappointed I missed out last time. Wasn’t a fan of the lottery setup, especially when it didn’t work in my favour :grinning:


#4

Me too, it wasn’t fun was it.


(Andrew Clark) #5

I was able to get a piece of them in their first crowdfund. There have been two subsequent rounds where they have included existing investors. Max each round was £1000.

Their CEO has stated that he would like to include the crowd but was limited due to EU rules. To go bigger they will have to go the Brewdog route presumably and issue a prospectus. My guess is that customers at least will be offered a slice (770k and growing at 60k a month). They might even do it in app.

If you want a piece you could do worse than join and also join their vibrant community forum where it is occasionally discussed.

In terms of valuation, they are a de facto unicorn now. Their upside is enormous. I wouldn’t sell my shares at £15 which would be 6x last valuation.


(Chris) #6

Sadly, being part of their community didn’t improve your odds of being an investor.


#7

Yes their last round was £2-ish, so well done :+1:

If only my Sound Energy shares would do the same haha! :sob:


#8

According to…? Expand upon this because I’ve seen no reliable consensus or news outlets referring to Monzo in :unicorn: terms


(Andrew Clark) #9

No problem. Last valuation was against pre-paid card model - they migrated something like 95% of users to current account. They now have 770k users, rising at 60k per month. They have done this with zero advertising.

Typically a bank with 1 million users is valued at 2 to 3 billion. They will hit 1 million in two to three months.

The recent Revolut valuation is important here. Monzo is the darling of Fintechs. They are regularly approached for takeovers.

They have delivered at an incredible pace, current accounts, pots, Apple Pay, android pay, web interface, joint accounts within two weeks.

TransferWise just got into partnership with them and their functionality is now baked into the app. Truly Banking as a platform.

All these banks with a budget for Fintech investment. Perhaps a better question Is, how are they not a unicorn?


#10

Overall I agree they’ll be a unicorn in the next round. Just a few observations:

Not true for legacy banks. See TSB takeover a few years ago. True for new fintech banks because of perceived scalability. All in all great for us.

I’ve seen people underestimate this, but this done right is huge. For a start it pushes a key metric upwards quickly and secondly the joint account process in legacy banks is too much hassle.


#11

This explains a bigger challenge they have when crowdfunding:


Freetrade crowdfunding service
(Viktor) #12

One of the best things (of the many) working here is the continuous investment chatter at the office: companies (public and private), products, markets. Just yesterday we got into a conversation about companies like WeWork and what will happen when there will be a shift in VC investments.

That said, we don’t have any rumours and if we did, it wouldn’t be great to share!

I’m really looking forward to Monzo’s next round. :fire:


#13

Cheers for your considered response. Just a few points that detract from unicorn status atm is the fact that Monzo remains a domestic business having just delayed international expansion & appointed a new CTO to prioritise scaling up in the U.K… Whilst Monzo is on the road to a million users, as of now it is still short of the coveted million. At the last round Monzo was valued at £280m (1/3 of a billion $), so this is all we have to go on given it’s a private valuation. Sure Monzo have made strides since then but it’s premature to be labelling Monzo as a de facto Unicorn for me given the comparables of Revolut/Transferwise are more similar to each other than similar to Monzo imho (and have business models that have generated revenue for some time). Having said that, I wouldn’t be surprised at the next round if the do become a unicorn for the reasons you detailed above.


(Alex Sherwood) #14

If they wrote their own prospectus then they wouldn’t have a cap on how much they could raise via crowdfunding so there wouldn’t be a cap on the number of people who could invest :eyes:


#15

Nice :paintbrush: Is it likely that they will or do we know whether they’re exploring this option?


(Alex Sherwood) #16

I hear they’re exploring the option :wink:


#17

Monzo poised to join ranks of Europe’s fintech ‘unicorns’

UK digital bank lines up $150m fundraising as it eyes $1.5bn valuation

https://www.ft.com/content/ef54082c-a16a-11e8-85da-eeb7a9ce36e4?desktop=true&segmentId=7c8f09b9-9b61-4fbb-9430-9208a9e233c8#myft:notification:daily-email:content


#18

Thanks @MBA1413

Notes from Monzo poised to join ranks of Europe’s fintech ‘unicorns’ if you don’t have a subscription:

  • Valuation greater than $1B after investment of about $150m. Goes on to say it’ll be more than quadruple the $356m valuation from November 2017 and is expected to be announced before the end of the year. Tom Blomfield says he could not comment on the fundraising.

  • Funds will be used to expand Monzo’s product range, so plans to launch short-term unsecured loans and high street interest savings accounts via third parties.

  • Monzo is signing up around 18k customers per/week and aims for 4m customers in the next couple of years.

  • Monzo plans on making more money by lending out more of it’s deposits, “…planned to increase its lending from 5 per cent to about 10 per cent of its deposit base, still well below the 100 per cent-plus of many traditional lenders.”

  • “…Mr Blomfield said more than 45 per cent of customers were putting at least £500 a month into their accounts and this was growing rapidly.”

  • “Longer term, he said, the company’s main revenue stream would be commissions from helping customers to manage their money better, such as by switching their savings to a higher interest account or suggesting a cheaper provider of gas, electricity or broadband.”


#19


(Alex Sherwood) #20

*sigh* the FT really needs to stop valuing Monzo as a bank & start valuing them as a tech company. The numbers don’t work unless you consider their growth rate. And their first revenue generating product was only properly launched a few months ago.