Monzo fears for future as virus crisis pushes losses to £113m
‘The ability of the group to continue as a going concern is subject to material uncertainties’
LOSSES at banking start-up Monzo rose to £113.8m from £47.1m in its latest annual report as it said disruption from the coronavirus pandemic had threatened its ability to operate.
The business said in its annual report that “the ability of the Group to continue as a going concern is subject to material uncertainties” following the pandemic.
Monzo’s revenues rose to £67.2m from £19.7m in the 12-month period to February. The amount spent by Monzo customers also rose to £10.9bn, up from £3.6bn the previous year.
However, the business warned that it expects growth to slow in 2020.
“We’ve seen organic customer growth slow as word of mouth drops, and we’ll see reductions in revenues and higher credit losses,” co-founder Tom Blomfield wrote in the report.
The business added more than 2.3m new customers in the past year to bring its total to 4.4m. It expects to add at least 1m more customers this year.
Monzo said in the report that it has chosen to delay some product launches because of the coronavirus pandemic.
“We didn’t feel they were the right products for our customers at this time,” the company wrote.
The start-up’s latest annual report comes after the company’s valuation dropped from more than £2bn to around £1.25bn in a June funding round, which saw the company raise £60m from investors including Swiss fund Reference Capital and Vanderbilt University. The start-up made up to 80 of its employees in London redundant this year and also offered to furlough 295 employees. Monzo said in the report that “we’re working hard to avoid further redundancies.”