DEEP DIVE o Overview o Executive Team o Product Stack o Customer Acquisition o Community Banking o Funding & Valuation o Financials o Unit ...

DEEP DIVE
o Overview
o Executive Team
o Product Stack
o Customer Acquisition
o Community Banking
o Funding & Valuation
o Financials
o Unit Economics

Business Overview

Founded: 2015 Headquarters: London, United Kingdom Total Funding: $497 million
Founders: Tom Blomfield Geographies United Kingdom Latest Funding: $75 million – June 2020
 Jonas Templestein Served: United States Valuation: $1.6 billion
 Paul Rippon Licensing: UK - Banking License (2017)
 Gary Dolman* Investors: Passion Capital, Thrive Capital,
 USA - Partner Bank
 Jason Bates* Goodwater Capital, Accel,
 Customer Retail individuals (4.45 million) General Catalyst, Y Combinator,
Executive President - Tom Blomfield
 Base: Small businesses (36 thousand) Reference Capital
Team: CEO - TS Anil
 Employees: 1495 as of Feb 2020
* Person has left the company

Partnerships at the core of Monzo

Savings: Cross-border Payments: Energy Switch: Business Banking: Micro-investing:
OakNorth Bank Transferwise Octopus Energy Xero Moneybox
Shawbrook Bank Ovo Energy Freeagent
Investec Digital Receipts
Charter Savings Bank & Rewards: Automated Finance: USA Banking: Video KYC:
Paragon Flux IFTTT Sutton Bank Jumio

Monzo has been built by an experienced set of founders, all diverging
 from competitor Starling Bank. While the executive team has only 2
 female members, 45% of the total employees are women.
 EXECUTIVE TEAM
Person Position Previous Experience Startups Founded Company Before Present
( indicates female execu7ves) (Before Monzo)
 Monzo
Tom Blomfield Founder, President 9 years 4 Starling Bank Monzo
Jonas Templestein Founder, CTO 14 years - Tech 1 Starling Bank Monzo
TS Anil CEO 27 years - Finance - Visa Monzo
Alwyn Jones Chief - Finance 19 years - Finance - Barclays Monzo
Mike Hudack Chief - Product 20 years - Tech, Product 1 Deliveroo Monzo

Lisa Nowell Chief - Risk 23 years - Risk - ClearBank Monzo

Sujata BhaSa Chief - Operations 24 years - Finance - Amex Monzo
Paul Rippon Ex-Founder 24 years - Risk 2 Starling Bank GBB, Barnacre Alpacas
Gary Dolman Ex-Founder 24 years - Finance - Starling Bank Antler Venture Partner
Jason Bates Ex-Founder 16 years - Product 1 Starling Bank 11:FS

Own Products Partner Products Savings Marketplace

 PRODUCT STACK Monzo Plus*

 Business A/c (SME)
Monzo started out with a prepaid account & card Energy Switch Energy Switch
in the UK. On obtaining banking license in April
 Rewards Rewards
2017, it introduced its current account, which
saw 94% adoption from existing customers. Personal Loan Personal Loan

 FX Transfer FX Transfer FX Transfer
It expanded to the USA in 2019 with its prepaid
 Savings Pots Savings Pots Savings Pots
account, card & savings pots offerings.
 Joint A/c Joint A/c Joint A/c

 Teen A/c Teen A/c Teen A/c

 Overdraft Overdraft Overdraft

 Current A/c Current A/c Current A/c Current A/c

 Monzo App Monzo App Monzo App Monzo App Monzo App

 Prepaid A/c & Card Prepaid A/c & Card Prepaid A/c & Card Prepaid A/c in&UKCard
 Discontinued Prepaid A/c & Card Prepaid A/c & Card

 2015 2016 2017 2018 2019 2020
 * Monzo Plus relaunched with improved features in 2020, after initial release in 2019

While Monzo’s primary customer base growth is driven by organic
 referrals, the fintech shifted gears to paid marketing-driven July 2020
 5000

 growth from 2018 with TV ad campaigns and more. 4.4 Mn
 4500
CUSTOMER ACQUISITION March 2020
 4 Mn
 Marketing spend grew 600% 4000
 Monzo aims to build customer stickiness by onboarding in 2019, compared to 2018 6 months
 more people from users’ social circles on the platform 1.3x

 Number of customers in thousands
 3500

 Average # of friends on Monzo per customer 3 Mn
 3000
 2018 2019 2020
 3 months
 Growth spurt from 1.5x
 15 19 24 TV ad campaign 2500

 2 Mn
 2000
 8 months
 User base growth was primarily 2x
 attributed to user referrals up to 2018 1500
 7 months 1 Mn

 Monzo launches in Nov 1000
 14 months 2x
 2015 with 5000 prepaid 500k
 card users in the UK
 14 months 5x 500
 100k

 0
 2015 2016 2017 2018 2019 2020

Monzo has been a community centric bank from the beginning,
 taking constant user inputs for product development.
 It has 44,352 community members as of July 2020.
COMMUNITY BANKING

 Online Forum Events Social Media

 • Active feedback in product • Country-wide community • Monzo Saving Squad on FB with
 development meetups more than 13,000 members
 • Ideas for new products and • Open Office days @ Monzo HQ • @MakingMonzo Twitter updates
 features on backend developments
 • Educational seminars, product
 • The Coral Crew – most active launches and more • Viral social media campaigns
 community members that act as • #YearinMonzo
 community leaders • #NoBarriersToBanking

The Monzo Community Forum is an interactive platform for users to
 ideate and give feedback, while Monzo employees can share
 updates, solve queries and actively engage with customers.
COMMUNITY FORUM
Proactive Feedback Frequent updates Customers’ wish…. … Monzo’s command Customers as investors

Monzo’s latest drop in valuation from $2.5 bn to $1.6 bn can be
 attributed to the Covid-19 crisis, impacted revenue streams & the
 continuing trend of net loss as the company focuses on growth.
FUNDING & VALUATION
 Monzo Funding & Valuation
Investors: 3000 7.00
VC/PE 6.24
 2500 6.00
 2500
 5.47

 Funding & Valuation ($ Mn)
 5.00

 Valuation per $ raised
 2000
 4.46 4.31
Corporate VC 4.19 1600 4.00
 1500 1400
 3.37
 2.98 3.00
Accelerator / Institution
 2.57
 1000
 2.00
 475
 500 360 401
 256 1.00
Retail
 121
 3 11.6 9 38.8 15 64.5 44 113
 0 0.00
Monzo has crowdfunded $31 Mn
 Jun 2015 Feb 2016 Oct 2016 Feb 2017 Oct 2017 Oct 2018 Jul 2019 Jun 2020
from more than 40,000 users over
4 crowdfunding rounds. Seed Series A Series B Series C Series D Series E Series F Series G
 Total Funds ($ Mn) Valuation ($ Mn) Valuation Per $ Raised

Monzo has been investing in its growth and has yet to reach profitability.
 It continues to grow its revenue streams with new products,
 while spending more on marketing & building in-house technologies.
 FINANCIALS
 Monzo Financials (in £’000)

Monzo Revenue Streams Net Operating Income Operating Expenses Net Loss
 35,658
Year Income Expenses 30000
 9,158
2016 • Interchange fee • Prepaid card scheme 5 120 1,814
2017 • Interest • Personnel 0
 • Marketing 2016 2017 2018 2019 2020
 (1,446) (6,889)
 -30000
2018 • Interchange fee • Prepaid card scheme
 • Interest • Personnel (30,546)
 • Banking services fee • Marketing (47,164)
 -60000
 • Technology costs
 • Current A/c costs
 -90000
2019 • Interchange fee • Personnel
2020 • Interest • Marketing
 • Banking services fee • Technology costs -120000 (1,13,816)
 • Partnership commission • Current A/c costs
 • Premium A/c fee (2020)
 -150000

 Monzo claims research & development tax reliefs from the HM Revenue & Customers
 department of the UK Government

Contribution Margin Per Customer
 10 2 4 2.5
 Feb ‘17 Jul ‘17 Feb ‘18 Jun ‘18
 0
 Feb ‘19 Jun ‘19

 Number of customers (Mn)
 2

 Contribution Margin (£)
 -10
 UNIT ECONOMICS -20 -15 1.5
 -30
 -30 1
 • Monzo’s initial focus was on growth alone, which -40

 eventually expanded to becoming profitable as well. -50
 -50 0.5
 -60
 -70 -65 0
 • While the digital bank began earning positive contribution Contribution Margin Number of Customers
 margins per customer in 2019, it still operates at net loss.

 Valuation Per Customer Marketing & Staff Costs Per Customer
 2500 5 30.00 27 4
 2320 4.5
 3.5

 Number of customers (Mn)
Valuation per customer ($)

 Number of customers (Mn)
 2000 4 25.00

 Costs per customer (£)
 20 20 3
 1400 3.5 18
 1293 1136 20.00
 16 2.5
 1500 3
 860 904 857 2.5 15.00 2
 1000 2 1.5
 360 10.00
 1.5
 500 1 3.01 4.32 1
 5.00 1.63 1.71
 0.5 0.78 0.5
 0 0 0.00 0
 2015 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

 Valuation per customer Number of Customers Marketing Staff Costs Number of Customers

FINTECH FRATERNITY

 THE TEAM

Afshan Priyamoni Sanjeev
@heycloudwatcher @PriyamoniD @sanjeevk_k
/afshan-d /priyamoni-debnath /sanjeevk2012

 Disclaimer:
 All data used for analysis has been taken from publicly available sources pertaining to Monzo
 All views & opinions mentioned are personal and do not represent views of any organisations or institutions.