Monzo: From startup to scaleup

Scaling up a business is no easy feat, and can present the founder with many hurdles to overcome. But scaling is a journey worth taking, as it takes your startup to new heights. A fantastic example of this is Monzo.

Monzo was founded back in 2015 by Tom Blomfield. Monzo is a neobank, originally founded in Britain, but now has a global user base. As of June 2023, Monzo had over 7.4 million customers. This is a leap from its beginnings of being constantly compared to Starling Bank, of which the founder of Monzo had previously worked for.

At Slush 2023, one of the world’s biggest startup events, TS Anil, CEO of Monzo, Sonali De Rycker, Partner at Accel, and Callum Burroughs, Correspondent at Business Insider discussed Monzo’s journey from startup to scaleup and the hurdles that were presented along the way.

Swapping a founder for a CEO

As mentioned, the company was founded by Tom Blomfield. He began and worked for a long time as the Founder and CEO of the company. This can be one of the biggest hurdles that startups face when scaling. Some founders have the skills to remain the CEO of the company as it scales globally, but some are more drawn to just solely being a founder. Realising that you may not have the drive or desire to be the CEO once your startup scales isn’t a bad thing, and should actually be celebrated. Bringing in a CEO to take over can be a moment for celebration, as it shows a commitment to the company that you want to make sure succeeds.  

Discussing Anil’s take over as CEO during the days of the pandemic, de Rycker commented: “TS would get online and be talking about what's going to happen, and he'd be all smiles. Meanwhile, it was two o'clock in the morning for him every single day. His days for months were nights But the one thing was he was always smiling, he was always in a good mood, and he was unflappable.”

She continued: “I've been through a lot of Founder CEO transitions. It's kind of the dark underbelly of the technology world and people don't talk about it. Now what I want to say is that this was one that was done in a celebrated way, we should celebrate great founder-CEO transitions that happen and as I say, this is more like a ‘refounding’ story in some sense.”

Choosing the right CEO to come in and take a hold of a company is no easy feat. It requires the new CEO to show dedication to the company, and a motivation to scale the brand in the same way as the founder. When you find the right CEO for your startup, the results can be the key factor in ensuring successful scaling.

Trust of customers

The trust of your customers is of utmost importance, especially when operating within the banking space. When it comes to money, people are selective about which banking products they choose, and that’s no surprise. The trust of customers was a key point in Monzo having the ability to scale, as without trust, the company wouldn’t be able to grow a solid customer base to have the potential to scale past being a small startup.

Anil remarked: “When we scale it means we have a great sustainable business model and that we’re delivering on our mission for millions and millions of Monzo customers. My personal standpoint with the transition, I like to think of it as being incredibly focused on what we will not change, and then building new muscles.

“So, what we did not change was the DNA of the company, which was the customers, because we did not change this maniacal obsession about designing delightful products that customers love, right? So you take that DNA and then add to it a whole bunch of muscles and scaling and I'm building product and shipping it faster. And the product roadmap that we have is not rocket science, but we know what we're building and we're building towards a financial control centre, a single place where customers will manage all of their money needs.”

As alluded to, this customer trust needs to remain even when scaling and changing over leadership. Scaling a business without customer trust and loyalty is an almost impossible task to undertake, so ensuring customers that the business remains in their best interest is vitally important.  

Key ways to grow

To grow your startup to a scaleup, you need to be recognisable through your marketing and values. People need to know your product for it to maintain market relevance, especially in the fintech space, as it can be quite saturated. For Monzo, luckily, marketing in the early days was quite easy, as information about the startup spread through word of mouth.

Another key way to grow, and one that Monzo harnessed, was to have the interests of the customer in mind when continuing to innovate. Recently, Monzo introduced a gambling block onto its platform. Through listening to customers, it realised that people need cool-off periods when it comes to their gambling accounts, and limits for how much money a person wants to spend at a time, which has all been taken into account and introduced to ensure the safety of users, as well as ensures longevity.

Another way that Monzo has taken customers’ interests in mind has been by launching a new investment product within the app.

Anil commented: “Most individual customers in the UK are stoked about investing, but don't enter the space for two reasons. The two big reasons well, the first is they don't understand it, because the industry has thrown a brick wall of terms and conditions at you as opposed to engaging you. That was one big gap. The second big gap was people think ‘Investing is not for me, it's for richer people.’

“But we saw interest is strong with the product that we launched two months ago, where the education is bite-sized, in the customer's language and really aims at not checking some box, but about really educating the customer better and the vast majority of our customers engage with that integration. It launched and within hours of launching, without a penny spent on marketing, we had 150,000 customers put themselves on the waitlist for the product.”

Monzo’s journey is one to be awed at. Within the highly competitive and saturated market of fintech, the startup came along and became a disruptive force within the industry. The ’hot coral’ cards can be found in millions of wallets worldwide, and their scaling journey isn’t stopping anytime soon.