FinTech: UK Digital Bank Monzo Eyes Potential Profitability In 2023
Monzo achieved solid revenue growth in 2022.
UK neobank Monzo achieved revenue growth of 250% during 2022, raising hopes that 2023 would be the first year it makes into the black.
Revenues surged 250% to £440m in the year ending December 2022, compared to the 92% growth to £154.2m reported for the year ending February 2022. Monzo now aims to break even this year, a singular achievement among Europe’s neobanks. The bank has been cash flow positive since October 2022. (Sifted)
Rival Starling became Europe’s first neobank to reach annual profitability in July 2022, with revenue growth of 93% due to increased lending. Earlier this month, Starling founder Anne Boden said in an annual letter to customers that the bank expects to quadruple profits this year, boosted by strong growth in the SME market, where it has garnered 520,000 small business accounts, amounting an 8.9% market share.
On the other hand, while Revolut’s CEO claims the neobank has been profitable for two years, the fintech has missed its deadline for filing accounts twice.
Monzo’s revenue is heavily reliant on its popular coral pink cards, with 7m UK customers, far ahead of Starling’s 3.5m and Revolut’s 5.75m. Monzo reported an average of 150k personal account sign-ups per month in 2022. Despite auditors expressing uncertainty about Monzo’s survival in 2020-2021, the bank has almost doubled its UK customer base from 3.9m to 7m.
UK retail banking customers switched providers at a record rate in Q4 2022, with Starling logging the highest net gains at 9,070 switches, followed by Monzo with 6,030.
Related Story: Monzo To Turn Profitable In 2023, Says CEO
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