fintech stories

What is Monzo, the banking app that conquered the U.K.

what is monzo

Monzo in an English fintech offering banking services in the UK and now expanding its international presence in other markets.

Companies like Monzo have emerged as an alternative to traditional brick-and-mortar banks. They have become a competitive powerhouse and have proven, time and time again, to have many benefits over other traditional platforms, like for example a more diversified investment portfolio, and in some cases even bill-splitting. In this post we’re going to explore those benefits and how they relate to Monzo Bank. We’ll give you an overview of the company, a brief history, and tell you about its features.

What Is Monzo?

Monzo is an English fintech company set to make its arrival in the US — by 2022. Having moved on from their beta version relatively recently, it aims to become the new household fintech in the US.

Features of Monzo

Monzo holds many advantages over traditional banks, as its diverse options make it stand out from the rest. Here are some of them:

Free Monzo Basic Account

The Monzo basic account enables the bank account holders to manage their spending budgets in a clear and visible way from the comfort of the smartphone.

Intelligent Notifications

The user gets notified of every single transaction. Whether the person is exceeding their budget, spending faster than expected, or even when making a simple day-to-day payment, notifications appear in real time.

Pots and Plans

Another thing that sets Monzo apart from the crowd is that clients can separate the money within their account as they wish. They can create different saving pots for different objectives, and they can also visualize how far - or how close - they are to reaching their goals.

Small Change Roundup

For those that really want to save up to their last remaining penny, Monzo is the way to go. This feature enables the user to save all of their remaining small change - round-ups - into one pot that can be employed later on.

Safety Is a Must

When utilizing Monzo, the FDIC insures up to $250,000. On top of that, features such as Touch ID, Face ID, fingerprint, or even PIN security measures are present. Instant card freeze and unfreeze modes are available too.

Monzo Is the New Big Thing

Another great Monzo bonus is the amount of money management and tracking tool options it possesses. Monzo has proven self-sufficiency and trust among the investors. Monzo is the new big thing.

Its main competitor in the United States, N26, decided to abandon American territory and forfeited the playing field. 

Why did N26 bail?

The main reason behind their decision to abandon the states is the amount of capital that would need to be invested in order to be able to carry. The other reason is their desire to focus solely on the European market, as most of their demand hails from that region. This decision by N26 has driven Monzo’s conviction and pushed for its US arrival. Since their main European competitor is out, there is a large possibility of nurturing a major client base from former N26 clients.

Even though N26 is out of the landscape, they still have to compete with US heavyweights such as PayPal and SoFi. Also, as this is an expanding market niche, even traditional banks are investing in their Online platforms, giving growing fintechs a run for their money. So, the competitive scene still looks fierce for Monzo.

Despite being relatively new to the American market, Monzo’s announcement for its arrival dates back to 13 June, 2019. During this phase, they distributed around 2,000 debit cards to prospect clients. Thai trial was done to test the waters with their alpha/beta versions — receive proper client feedback.

It is expected that Monzo will access the US market via Sutton Bank, an Ohio-based banking firm that they are partnering with. Many of the features that made Monzo a big name in the UK will also migrate to America as well. Some of them are spending notifications, and contactless payment. Opposed to its UK counterpart, the US franchise isn’t offering money lending services.

History of Monzo

Monzo Bank started in 2015 under the direction of Tom Blomfield, Jonas Huckestein, Jason Bates, Paul Rippon, and Gary Dolman, under the name of “Mondo Bank.” They all met as former colleagues from Starling Bank. 

The company’s name was later changed to “Monzo” after a legal dispute in 2016 with an unknown company. The name was registered at Companies House under “Monzo Bank Ltd” in 2016, making it official.

The company’s rise is prominent, to say the least. As of February 2016, they hold the fastest crowd-funding campaign in history, as they reached £1M in 96 via Crowdcube, an investment platform.

The capital income kept growing, as in October 2016 the firm managed to raise £4.8M with the help of Passion Capital. Another £2.5M round was also issued via Crowdcube, months later.  

In 2017 their newfound success would not stop, proving they were not a one-hit wonder, but a company with solid growth opportunities. By November 2017, the company was valued at £280M, after a series of fundraisers promoted by companies like Thrive Capital, Passion Capital, Orange Digital Ventures, and Goodwater Capital.

In 2018 they started gathering private investors from many platforms and backgrounds, increasing the company’s net worth to £1 billion. By 2019, after a Series F funding, Monzo duplicated its value by an impressive £2 billion.