In 2018, Monzo welcomed its millionth customer – putting it on the path to becoming the next European fintech ‘unicorn’ with its next round of funding.


It’s been a long and auspicious journey for the digital bank app, which launched with a simple prepaid card service in 2016.  Initially allowing users to track budget and spending, Monzo has now extended its product portfolio to include mainstream offerings such as current accounts. In 2018, Monzo has signed up more than 20,000 new users every week, and in the six months since the end of its prepaid beta programme in April, its customer base has grown by 75%. Some 15% of new UK current accounts are opened through the company, and so far, its users spend £4 billion through its cards.


It’s quite the laundry list of achievements for a business that’s not yet four years old, and it’s made an impression on the SME community. As a PR agency, we get approached by companies with Monzoesque aspirations all the time. It’s understandable: the company’s not made a splash so much as a tidal wave. Every business wants to be a Monzo.


So here we have tried to isolate some of the factors that contributed to Monzo’s success.


Start-up experience

Monzo’s leaders were exposed to the world of fintech entrepreneurship early on. Founder and CEO, Tom Blomfield, worked as a management consultant after studying law at Oxford.

While at university he cofounded GoCardless with two friends who then pitched the company to Y Combinator, the renowned innovation incubator in Silicon Valley. Once GoCardless, which offered a streamlined method of collecting direct debits, had been established, Blomfield sought a new challenge.


He became Chief Technology Officer at Starling Bank in 2014: one of the first fintechs to take advantage of the UK government’s decision to open up competition to high street banks in the wake of the global financial crisis.




Monzo had an enviable book of contacts from the beginning – and a robust network to call upon.


At Starling, Blomfield worked with Gary Dolman, a former executive at ABN Amro, who later became CFO of Monzo; Paul Rippon, the former head of banking operations at AIB (who later became Monzo’s Chief Risk Officer); and Jason Bates – who’s worked with Google, Barclays, and Facebook as a digital innovation consultant, and later co-founded Monzo. During his time at GoCardless, Blomfield even enjoyed off-the-record advice from Mark Zuckerberg and Paypal’s Max Levchin.



Investor interest

Monzo gained a lot of popular attention for its successful crowdfunding campaign in 2016:  raising $1 million in 96 seconds on Crowdcube – and taking its P2P total to $4m so far. The company has also received considerable investment from other sources totalling over $100 million.


This success can perhaps be traced to a broader shift in investor attitudes towards fintech. No longer seen as a marginal outlier, fintech was becoming a real alternative to bank finance around 2016. That, combined with Monzo’s extensive network of tech influencers, laid the foundation for its record breaking 2016 crowdfunding campaign.


In advance of its launch on Crowdcube, Monzo had already created some buzz with 6000 pre-registering to take part in the campaign with an extra push sent out to Monzo’s existing customer waiting list. Blomfield also appeared on BBC Breakfast to promote pre-registrations – which eventually exceeded 44,000 in number.


When registration opened, it crashed Crowdcube: something Blomfield admits gave Monzo an additional PR boost. Monzo’s 2017 campaign was no different: pre-registration pledges hit the £2.5 million target in four hours, and eventually raised £6.78 million in total.


Monzo also appealed to traditional VC investors, raising £19.5 million from New York-based Thrive Capital (with participation from Passion Capital and Orange Digital Ventures), and it received capital from Accel Partners in its latest funding round.


A strong focus on user experience

Monzo’s early days were nothing if not democratic: users could submit suggestions and requirements to an online forum, contribute to discussions about the company on Twitter, and even vote on features they’d like to see. ‘Monzonauts’ even gave the business its name: originally called ‘Mondo’, the company faced a trademark challenge from another business and tasked its subscribers to come up with a new name, using social media and the press to promote the campaign.


Monzo also developed a lively API ecosystem, encouraging users to develop their own apps through hackathons – which simultaneously expanded the options available to customers, enhanced user experience, and earned the attention of tech industry journalists.


By allowing Monzonauts to define its journey and give them a stake in the company’s progress, Monzo created a bond with its user base, while simultaneously (and critically) ensuring that it was developing a product that users would love. This loyalty facilitated early referrals, which in turn accounted for 80% of new customer growth. Monzo created an air of exclusivity with interactive waiting lists and incentives for referrals such as early access for those who told their friends. It was an innovative marketing strategy for its time, and it helped the company create an authentic brand.


Achieving the same level of customer success doesn’t simply rely on duplicating Monzo’s referral tactic. It relies on fintechs finding a new way of engaging with their customers to create an authentic brand that aims to resolve an everyday consumer problem. Monzo’s approach to customer experience contrasted significantly with traditional banks which had become outdated and stuffy.


The changing banking landscape

Monzo didn’t necessarily have first-mover advantage, but they certainly had early-mover advantage: they saw the potential in a fractured post-crisis banking landscape before many others did – and that traditional financial services solutions would eventually make way for tech-based solutions.


Since 2015, some 3,000 banks have disappeared from high streets. At the time of Monzo’s launch in 2016, the number of mobile banking users across the world had risen to 47% – and rising.  This, perhaps more than anything else, is responsible for Monzo’s success. A company can’t fill a gap in the market until the gap is spotted. Blomfield began looking into starting a new bank in 2015 and anticipated that it would take two years to become regulated – so work on the product began immediately, and the company launched its pre-paid debit card beta in November of that year. The conditions that led to Monzo’s ‘overnight success’ were long in the making: it acted early, thought long-term, and reaped the rewards.


It’s tempting to treat Monzo as an inspirational success story, and there are certainly lessons to take from its journey. But newbie entrepreneurs need to acknowledge that it wasn’t an easy ride and launching the next Monzo will take hard work and innovation. Monzo was born in a perfect storm of luck, foresight, contacts and skill: it had the right people, built a great product, arrived at the right time, and it enjoyed a receptive market that was tired of the status quo.


Genius, strategy, and a unique offering got it where it was – but so did good connections, strong experience, and a global financial crisis. Most entrepreneurs won’t have the ear of Mark Zuckerberg. To gain recognition, they’ll need to do the quiet, unglamorous work of building a business – and a reputation – from almost nothing. It can be done. It’s just not quite as easy as Monzo makes it look.


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