Monzo is a leading UK-based digital bank on a path to become the one app customers depend on to manage their entire financial lives. We are extremely excited to partner with CEO T.S. Anil and the incredible Monzo team as we lead its latest fundraise.
Over the past 10 years, an exciting new wave of technology has permeated a static – and widely uninspired – financial services industry. While many companies have invested in digital transformation to improve service and personalize the user experience, traditional banks have lagged, leaving consumers frustrated as they navigate badly designed products, feature-poor online interfaces and opaquely disclosed, unexpected fees and costs. This creates a big opportunity for digital-first banks (also called “challenger banks” or “neobanks” in different parts of the world) to challenge the entrenched, legacy-model incumbents.
Natively digital banking enables a vastly better and more accessible experience than has ever been possible. The United Kingdom has been a hotbed of fintech innovation, and today, over a third of the adult UK population (nearly 20 million consumers) hold an account at a digital-first bank. We’ve reached an inflection point in the digital banking sector that has prompted incumbent banks to scramble to invest in their digital offerings (though their legacy IT infrastructures can never compete with or match the levels of innovation and pace of digital natives).
Monzo is on track to become a leading UK financial institution
Monzo's ambition is to build the one app to manage customers’ entire financial lives, and it’s well on its way to achieving that goal through an impressive suite of integrated financial products. Monzo systematically embraces customer feedback to help guide its product roadmap to include innovative features (such as savings pots, instant spend notifications, flex spending cards, etc.) In addition to its Instant Access Savings Pot, Monzo recently launched Monzo Investments, Call Status and Cashback. Monzo’s intense customer focus results in it consistently topping UK industry polls for outstanding customer service – including being ranked as the #1 personal and business current account provider in the CMA’s customer satisfaction survey, a bi-annual independent survey established by the UK’s Competition and Market Authority. In an industry with Net Promoter Scores typically in the low teens, Monzo is an impressive outlier with an admirably high Net Promoter Score of around 70.
Reflecting the opportunity to disrupt a large and profitable market, the fintech banking sector has become crowded over the years with investors pouring in more than $30 billion of funding into these digital-first banks from 2017 to 2021. Monzo separated from the pack early in becoming a fully licensed and regulated bank in the UK in 2017 and is one of the very few that have achieved a rare combination of scale, growth, and profitability:
Scale: Monzo has accumulated more than 9 million customers – one in seven UK adults – and has added more than 2 million last year alone with minimal marketing spend! Monzo’s business banking offering is also achieving heavy adoption with more than 380K businesses – one in sixteen UK businesses.
Growth: Even at scale, Monzo continues to invest and grow rapidly, constantly innovating, seizing opportunities, and responding to customer needs. The bank has diversified strategically, so it touches more parts of its customers’ finances, adding new savings and investment products last year. Importantly, growth has been efficient with the majority of new customers joining via word of mouth.
Profitability: Monzo’s rapid topline growth has been coupled with prudent financial management; it has been cash-flow positive since October 2022 and profitable since March 2023.
Monzo’s enthusiastic customer base, consistently strong execution and strategic leadership have created the largest digital-first bank in the UK and the seventh largest bank in the UK by customer count. As its user base continues to diversify across age and geographic locations across the UK, we believe Monzo can be the first new entrant to reach the size of the established legacy UK banks that have traditionally dominated the market. What’s more, Monzo is exploring how it can take its “Monzo magic” to international markets and has a team currently developing a product tailored to US customers.
CapitalG’s investment in Monzo
We have tracked Monzo’s progress since 2017 when it had ~200K weekly active users and was only just starting to offer checking accounts. Early this past year, we met CEO T.S. Anil who immediately blew us away with his leadership, humility and customer orientation. With him at the helm, it’s no surprise that Monzo has achieved its impressive growth, scale, and profitability. Led by an inspirational team, Monzo brings the best of banking and technology together and is on track to become one of the U.K.’s largest and most adored banks. We are excited to lead Monzo’s Series I and join the firm on its mission to “make money work for everyone.”