Monzo future in doubt as losses mount

The fintech unicorn says current economic and regulatory climate could stymie any hopes of a profit

The future of fintech unicorn Monzo is in jeopardy after the firm reported its annual losses have more than doubled due to the pandemic.

The UK-based startup announced post-tax losses of £113.8 million in its 2020 earnings report, up from the £47.1 million recorded in 2019.

This was despite the firm more than tripling its revenue to £67.2 million, from £19.7 million in 2019. At the start of the year, there were plans to expand into the US market and invest in new jobs, but the economic effects of the coronavirus crisis have put these plans on hold indefinitely.

"Our revenue streams have been significantly impacted by the COVID-19 pandemic and resulting macro-economic uncertainty," Monzo said in its report. "Regulatory reviews will also lead to stricter financial crime requirements."

"This may result in lower forecasted customer numbers and revenues, along with increased costs associated with correcting areas of concern. This increases the risk that the Group will not be able to execute its business plan, which could adversely impact its ability to generate a profit or raise sufficient capital to meet future regulatory capital requirements."

Monzo now has 4.3 million users after adding some two million more since the start of the year, but the key to its future will be finding more ways to monetise its customer base. The firm has launched paid accounts (Monzo Plus) and also business accounts recently, but it has also scrapped plans to hire 500 new workers and, instead, cut its workforce by 8%.

The wider fintech sector has also felt the impact of the pandemic, with the government recently announcing an independent review of the industry. Former Worldplay CEO Ron Kalifa will lead a strategic review to establish priority areas for policymakers and regulators to explore in order to support the sector.

Related Resource

The digital revolutionaries

Showcasing how transformative leaders are delivering amazing experiences with amazing simplicity

Download now

The UK fintech market is estimated to contribute around £7 billion to the economy, employing around 60,000 people across the country, according to the government.

"The UK is one of the leading places in the world to start and grow a fintech firm, and I am determined to ensure this continues," said economic secretary to the treasury John Glen. "The sector is worth around £7 billion to our economy and will, therefore, be vital in ensuring both that the country bounces back post-coronavirus, and continues to be at the forefront of financial innovation now we have left the EU."

Featured Resources

Unlocking collaboration: Making software work better together

How to improve collaboration and agility with the right tech

Download now

Four steps to field service excellence

How to thrive in the experience economy

Download now

Six things a developer should know about Postgres

Why enterprises are choosing PostgreSQL

Download now

The path to CX excellence for B2B services

The four stages to thrive in the experience economy

Download now

Most Popular

Microsoft is submerging servers in boiling liquid to prevent Teams outages
data centres

Microsoft is submerging servers in boiling liquid to prevent Teams outages

7 Apr 2021
How to find RAM speed, size and type
Laptops

How to find RAM speed, size and type

8 Apr 2021
Hackers are using fake messages to break into WhatsApp accounts
instant messaging (IM)

Hackers are using fake messages to break into WhatsApp accounts

8 Apr 2021