Challenger bank Mondo yesterday raised £1m in just 96 seconds on Crowdcube, with investor demand crashing the equity crowdfunding platform’s website in the process.
In what Crowdcube founder Luke Lang called ‘the fastest equity raise ever’, the app-only bank hit its crowdfunding target in just a minute and a half after massive demand from investors forced Crowdcube to delay the offering and reinforce their site.
Mondo CEO and co-founder Tom Blomfield confirmed that 1,861 people purchased equity in the bank during the limited time the campaign was open, with an average investment of £542.
Valued at £30 million, the company's crowdfunding campaign is part of a larger £6 million fundraising round, with £5m provided by investors Passion Capital earlier this year.
The mobile-only bank offers customers banking services combined with a personal finance app, tying a debit card to a mobile app that allows customers to monitor their spending via graphs, charts and notifications.
Mondo joins other online ‘neobanks’ such as Atom, Starling, and Tandem. Although it currently trails its three main rivals in terms of total funding, it is the only challenger bank to currently boast a live product.
Available only in the UK, at present Mondo serves 1,500 active users, with 45,000 more on a waiting list. The company hopes to be granted a full UK banking license later this year and then go on to expand its customer base.
While other neobanks also offer personal finance products, Mondo is currently the only one to offer customers the chance to become shareholders, which it believes will boost customer engagement and loyalty.
Mondo’s long-term vision is to combine their current banking and personal finance app product with a marketplace of service providers for mortgages, money transfers and consumer loans. According to Mondo this will mean that the customer, not the bank, will choose the terms, ensuring access to deals that suit them.
New breed of investor
According to Tim Wright, founder of crowdfunding consultants twintangibles, Mondo’s success could be an indication that crowdfunding is embedding itself as “the go-to place” for a whole new breed of entrepreneurial investors.
“If this is the case then that’s a good thing”, continued Wright, “but one of the things that’s becoming apparent is just how these offerings are being presented. There’s been criticism of how platforms are presenting the figures and how genuine they are, and concerns over how much of the numbers that are being released at particular points are being pre-committed.”
“So there is a little bit of ‘smoke and mirrors going on’, said Wright, “but anything that indicates a growing acceptance in the marketplace has got to be a good thing”.
About Tom Herbert
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