Losses at UK based digital bank Monzo continue to mount, according to a report. Monzo is said to have generated £113.8 million in losses versus year prior losses of £47.1 million. Simultaneously, top-line revenue rose to £67.2m from £19.7m for the fiscal year-end February, according to the Telegraph.
Monzo has around 4.4 million users – jumping over 2.3 million in the past year but this growth may slow in 2020 with only 1 million new customers expected to be added.
It was reported in June that Monzo raised £60 million in new funding at a significant decrease in valuation – reportedly a 40% haircut during a tough economic environment.
The year has been challenging for Monzo as COVID kicked in buffetting all industry sectors.
Earlier this year, Monzo founder Tom Blomfield stepped away from his CEO role with TS Anil, formerly the Monzo US President taking over. A company house filing indicates that Blomfield is no longer a director at the Fintech.
The digital banking sector has been red hot during the last couple of years. But as digital banks rose in prominence, traditional banks have stepped up their pace of change and focusing more on innovation. Meanwhile, the sector has become very competitive as a growing number of Fintechs offer bank-like services.
Some prognosticators see digital banks as faltering over the next 24 months and ripe for consolidation.
Alternatively, Marcus, the digital banks founded by Goldman Sachs that operates both in the US and UK, saw accounts balloon by $20 billion during Q2.
