The boss of UK digital bank Monzo Bank Ltd. said he’s targeting growth rather than immediate profit during a turbulent time for the fintech industry, after nearly doubling annual revenue while widening losses.
Monzo is still hiring and aims to build out its buy now, pay later service while looking to expand in the US, Chief Executive Officer TS Anil said in an interview. The London-based firm reported revenue up 92% to £154.2 million in the year through February, while net losses before onetime charges such as last year’s staff stock options rose 2% to £119 million.
According to Anil, the bank is on track for being profitable and could move into the black quickly, but it would be a “disservice” to its long-term ambitions. “We’re building a responsibility, investing smartly, not trying to just burn large numbers of dollars on marketing, acquiring customers,” he added.
Monzo has continued to grow since February, Anil said, even as the fallout from Russia’s war in Ukraine shook the financial industry and heralded job cuts along with a sharp decline in valuations at fintechs such as Klarna Bank AB.
“I have seen many downturns before, and I think what’s common to downturns is that you separate great companies from the rest,” Anil said.
Monzo, which was founded in 2015, is one of the UK’s largest digital banks with about 5.8 million customers after raising £450 million in December 2021. The CEO confirmed Monzo would not be seeking to raise further capital this year.
The digital bank joined the buy now, pay later market in March with an option to spread the cost of purchases over three months interest-free, or over six to 12 months with interest. Monzo Flex currently has about 35,000 customers and 300,000 on the waiting list.
The firm also increased its headcount by more than 40% last year to 2,300, according to its annual report. Monzo withdrew its application for a full US banking license in October 2021, though Anil said it was still committed to the market and was partnering with a sponsor bank to build the business.
–By Aisha S Gani (Bloomberg)