Monzo hits monthly profitability for the first time ever 🥳; Sam Altman's Worldcoin closes one of the biggest crypto funding rounds in 2023 😳; Challenger banks have a new competitor… JPMorgan 👀

FinTech is Eating the World, 31 May

Hey Everyone,

Happy Wednesday! Yesterday’s issue was hot, but today’s… 😳 We’re looking at Monzo which hit monthly profitability for the first time ever (how we got here + a deeper dive into Monzo’s strategy), Worldcoin that closed one of the biggest crypto funding rounds in 2023 (time for UBI now?), and challenger banks that now have a new competitor, and its name is JPMorgan (+ a bonus read on JPM’s badass FinTech strategy). Let’s jump straight into the fascinating stuff 🌶

Monzo hits monthly profitability for the first time ever 🥳

The news 🗞 British challenger bank Monzo has hit profitability for the first time this year. It marks a major milestone for one of the UK’s most renowned digital banks.

Let’s look at the numbers and how we got here.

The numbers 📊 Monzo reported a net operating income of £214.5 million ($266.1 million), almost doubling year-over-year from £114 million.

Losses at the bank nevertheless came in at a substantial £116.3 million — though this was slightly lower than the £119 million net loss Monzo reported in 2022 and allowed the neobank to reach profitability in the first two months of the year.

It also added 1.6 million new customers this year, bringing them up to 7.4 million and more than 10% of the UK population.

How we got here? 🤔 One word - lending. Monzo’s strong revenue performance was mainly driven by a bumper year for its lending business. Challenger bank’s total lending volume reached £759.7 million, almost tripling year-on-year, while net interest income spiked by 382% to £164.2 million.

Subscriptions play an important role in profitability too as paid accounts now total 350,000.

Monzo declined to share a figure on how much of a profit it is making currently. The firm said it is on track to reach full-year profitability by the end of 2024.

✈️ THE TAKEAWAY

Lessons learned💡 Monzo is a brilliant reminder of a story as old as time: lend money + solid risk management = make money. It’s that simple yet 90% of neobanks don’t get it… 🤷‍♂️ Obviously, you have to be good at it too. And Monzo is really good at what they do - their net promoter score is +67 (even the mighty Apple gets +47), so customers love them. Hence, focus + lending + strong brand makes wonders, and Monzo definitely deserves to be the 7th largest UK retail bank. More about how they got there here:

ICYMI: The Monzo Pivot, or how challenger bank transformed itself in just 2 years 🚀