Monzo fears for fu­ture as virus cri­sis pushes losses to £113m

The Daily Telegraph - Business - - Business - By James Cook and Matthew Field

‘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.”

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