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Monzo: The Rise and Rise of the Coolest Challenger in the Class

By Katy Bloomfield, Comms Director, TopLine Comms

(Katy Bloomfield, Comms Director, TopLine Comms)

Monzo, a digital bank popular with millennials, is the fintech success story that many start-ups dream of. It launched in 2016 with a simple, yet eye-catching, prepaid card service; bright coral plastic versus the more subdued traditional hues.

Fast-forward to 2018 and the three-year-old business has welcomed its millionth customer as well as secured new finance, boosting its value to more than $1bn (£787m).

Its growth trajectory is impressive, to say the least. Monzo’s initial offering enabled users to track their budgets and spending habits. It now offers a wider portfolio of products including mainstream services like current and investment accounts. In 2018 alone, the business grew its customer base by 75%, signing up 20,000 new users per week. In terms of market share, at least 15% of new UK current accounts are opened through Monzo and its users spend around £4 billion through its cards.

This list of achievements is extraordinary for such a young company. Monzo is undoubtedly the latest fintech ‘unicorn’, the pinup posted on every SME’s vision board. They all want to achieve the same level of success – in the same, almost overnight fashion. The problem is that this sort of celebrity aspiration fixates on the glossy glory, without understanding all the background factors that made it happen.

Out with the old and in with the new


No matter how great an idea, if it’s launched before its time then it will sink like a stone. The digital age coupled with the 2008 recession ushered in a banking revolution which provided fertile soil for Monzo’s launch and growth. Of course, Monzo wasn’t the only fintech sniffing around – but it spotted a lucrative opportunity in the post-crisis banking landscape before many of its rivals, and it moved fast.

Traditional financial services, like high street banks, are disappearing from our lives in favour of tech-based solutions. When Monzo launched in 2016, the number of mobile banking users around the world had already risen to 47%. Monzo could not have timed its arrival better, filling a gap in the market that a few years previously had not even existed.

The key takeaway here is to pay attention to market shifts and trends. There is always something new around the corner – not necessarily brand-new, but a new way of doing something old, better. Watch for it and when you spot that gap, move fast.

Focus on the user experience

Monzo embraced its millennial ethos from the get-go, creating a democratic culture that extended from within its walls to its customers. Users were encouraged to weigh-in on the product and share suggestions for features they’d like to see in an online forum. Public discussions about the company on Twitter were welcomed and engaged with. Needless to say, social media played a crucial role in promoting the campaign and the brand, as well as building relationships with the media and prospects.

When the company’s original name, Mondo, faced a trademark challenge from another business, loyal ‘Monzonauts’ came up with the company’s name. Monzo created a real bond with its user base, allowing Monzonauts to guide the company’s journey and feel personally involved in its progression. This was entirely motivated by one driving factor: to develop and perfect a product that users will want, love and recommend to others. It worked; early referrals accounted for 80% of the company’s new business.

Monzo also cleverly tapped into its tech-savvy user base to develop a dynamic API ecosystem. It introduced hackathons to encourage users to build their own apps which not only enhanced the Monzo customer experience but also got the business in the news. The trick for fintechs eager to replicate Monzo’s success is not to copy and paste its tactics, but to look for innovative and authentic ways to engage with their customers. The question always to ask is: what is the consumer problem and how can my product or service solve it?

 Network, network and network some more

Monzo’s leaders were no strangers to the world of fintech or entrepreneurship. Founder and CEO Tom Blomfield cofounded GoCardless, which offered a streamlined method of collecting direct debits, with two friends while studying law at Oxford. They pitched the company to innovation incubator Y Combinator in Silicon Valley and made some enviable contacts in the process – including Mark Zuckerberg, who reportedly gave Blomfield some off-the-record advice. In 2014, Blomfield became Chief Technology Officer at Starling Bank, one of the UK’s first fintechs to move in after the financial crisis. In this role, he met and worked with many top industry people – some of whom went on to co-found Monzo or join its senior ranks.

Most entrepreneurs won’t have Zuckerberg on speed-dial but that doesn’t mean their business is doomed to fail. No doubt Blomfield and co. experienced their fair share of dead-ends and unreturned calls before getting a foot in the door. But they kept on pushing and networking. Entrepreneurs have to be charming yet somewhat shameless and embrace that old maxim of who you know versus what you know. And that means attending fintech events, entering fintech awards, sponsoring fintech activities like hackathons and coding competitions, and standing up as industry speakers. It means building a brand, building a profile and making friends.  

Interest investors

Monzo earned some substantial fame for its crowdfunding campaign in 2016. It successfully raised $1 million in 96 seconds on Crowdcube (crashing the site in the process – an unforeseen PR boost) which took its P2P total to $4m. Since then, the company has attracted investment from multiple other sources, totalling over $100 million.

There is no doubt that Monzo had a compelling offer but this overwhelming success was also attributable to a shift in investor attitudes towards fintech. Once seen as a potentially interesting outlier, fintech became a real alternative to bank finance in 2016, with a growing audience hungry for digital innovation. 

In addition to crowdfunding, Monzo called on its extensive network in the fintech sector as well as appealed to traditional VC investors. It’s a winning approach that calls for another tried and tested cliché: spread your eggs across many baskets. It also goes to show that a very public display of consumer interest in a new product will without doubt, interest the investors.

Yes, Monzo is an impressive and inspirational success story. Its journey offers entrepreneurs many good, relevant lessons. But it’s important that those who put Monzo up on a pedestal realise that it will take more than the luck of the gods to achieve a similar trajectory. Unless another perfect storm of timing, genius and skill is around the corner, achieving even a modicum of Monzo’s success will require working hard, paying attention, making contacts and keeping the customer front and centre at all times. 


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