Unprecedented growth I believe.
They say āā¦the average Monzo balance was a mere Ā£150 a few months ago.ā but on Reuters it said āAt present only 1 in 5 of its users deposit their salary, with average balances of 1,400 pounds per month, its chief executive Tom Blomfield said.ā and that was a couple of months ago
2 Likes
I think the Reuters article is saying that of the 1 in 5 who do pay in their salary, their average balance is Ā£1400; whereas I think the FT is saying the average balance is Ā£150 across the whole customer base.
This is the only way I can reconcile it without more info.
Smartphone-only bank Monzo eyes billion-pound valuation
London-based bank set to become fintech āunicornā after lining up $150m of funding
In addition, Crunchbase is reporting an undisclosed amount of funds raised:
https://www.crunchbase.com/organization/mondo?utm_campaign=daily&utm_medium=email&utm_source=list_alert
Thought it could be because it hasnāt materialized just yet as it cites:
https://www.unquote.com/uk/news/3011358/vc-backed-monzo-seeks-usd15bn-valuation-in-new-funding-round
Yep hard to say, but it feels like they used that figure as it lends well to the narrative. So I was just giving a counter statement. I could have referenced the other FT article which mentions 45% of users put in at least Ā£500 per/month. Between all of these statements itās still not clear how much the average balance is, for instance is that active accounts? Average of the peak balance? Average peak over a quarter etc.
My thing is Monzo, Revolut, Starling etc succeeding helps us all, that doesnāt mean they are beyond criticism, just feels like this isnāt the thing they should be criticised on.
3 Likes
To be fair, if there is one thing all companies should be criticised on - whether we love them or not - it is their financials.
1 Like
As a investor sure look at the financials in detail but criticising financials like this seems off. Monzo has done really well to reduce the average cost per/account to Ā£15 per/account as stated in their last annual report. And they are moving in the right direction, with what can only be considered as a āliteā bank, hence a lot of users not going full Monzo or ditching their old accounts and Monzo is working on fixing this.
The opinion piece is off, it mentions young and stretched, has the author never been young? Are they now not richer than what they were? Then it goes on to say lend up to Ā£1,000 to buy laptops and boilersā¦ really? Then thereās the Ā£150 which has no further explanation or source and finally throw in a mention of down rounds and comparison to a long established provider. In which case why bother doing anythingā¦ curious on what the author of that post thinks Monzo is actually worth.
4 Likes
If you divide Ā£71,000,000 in customer deposits (from the Balance Sheet) by say 466,000 customers would produce be Ā£150 average balance figure.
The key word in opinion piece is opinion and I personally donāt find a healthy dose of skepticism as off. Itās good for balance imho.
1 Like
I donāt think Safās complaining about skepticism in general, theyāve just pointed out that quoting that particular figure is potentially misleading.
Of course skepticism is important 
3 Likes
At no point did I say Saf was complaining, Iām just rationalising where such figures may have come from and that like he said narratives can be spun, but on both sides.
3 Likes
Itās cool, always happy for alternative takes on things.
4 Likes
Tom Blomfied in the latest podcast with other digital banksā CEO Starling and Atom bank said that they actually reduced it even further, to Ā£5-6.
Some other remarks are:
- 1 Million users by September 2018
- 3-4 million by 2019-2020
- Breakeven late 2019 (which at that time theyāll consider expanding internationally))
4 Likes
Thanks 
and they topped 900,000 users today.
5 Likes
As it is above the European Unionās ā¬8m crowdfunding cap, Monzo will be required to build a formal prospectus for the round.
At its last crowdfunding round earlier this year, rival banking fintech Revolut received more than 40,000 requests to pre-register on equity crowdfunding platform Seedrs. As the round closed, just under 5,000 investors managed to join the round at a cap of Ā£1,000 per investor.
Iām hoping they do something similar and cap the round @ a reasonable limit.
http://dev2.cityam.com/261752/exclusive-monzo-plans-crowdfund-20m-chases-coveted-unicorn
5 Likes
This was mentioned on their slack. They āaccidentallyā left a mention of it in an Android release. Guys on the diff the packages every time thereās a release.
2 Likes
So letās say they adopt the same cap. For their last crowdfunding round just over 40k users pledged to invest & if the same number invested this time & they all invested the maximum Ā£1k, 20k users would get to invest.
Except Monzo has 6x as many users now, compared to how many they had in March 2017. So if 6x as many people want to invest, theyād have to cap the investments at about Ā£80. Which isnāt the end of the world.
6 Likes
Iām just hoping itās not a lottery again.
1 Like
I see your logic. However, the average pledge in the last round was Ā£293 (= Ā£12,000,000/41,000).
Thereās inevitably going to be the trade off between maximising the number of investors who can take part and imposing a satisfying cap on investment.
In both Monzoās and Revolutās latest rounds, many investors were left disappointed because theyāre simply oversubscribed. Ā£80 limit would appear too low and maybe Ā£1000 might be deemed too high. Ā£500 would be great in my opinion but I imagine it would annoy existing crowdfund investors for various reasons I disagree with.
What are others thoughts on a reasonable limit?
1 Like
I donāt remember if it was on this forum - canāt find it - but somewhere I remember a crowdfunded startup explaining that if they donāt cap the number of investor participants at a high enough average investment, rather than raising money, the investment ends up costing them money due to the admin overheads.
2 Likes
It was Monzoās CEO who said that in their community -
We would love to include more people in our crowdfunding - I speak to people every week who are disappointed that they missed out in previous rounds. Itās really frustrating for us that we canāt let everyone put money in who would like to.
There are 2 issues;
Thereās a ā¬5m EU cap on crowdfunding (which gets reset every 12 months).
Administration fees cost around Ā£4 per crowd investor per year. Weāll probably need to pay these for at least 5 years until we eventually IPO. So call it Ā£20 per investor in admin charges.
Taking Ā£10 from 100,000 people would raise Ā£1m but would cost us Ā£2m !
I would love it if Monzo was a bank that was entirely funded by its userbase. Weāre exploring ways of making this possible, but itās sadly not straightforward.
emphasis mine, quote from here
6 Likes