Monzo CEO steps down as company takes 40% hitby
Right in the middle of a funding round that signals a devaluation for the digital bank, co-founder Tom Blomfield stepped down as CEO.
Less than a year after being hailed the UK’s second most valuable fintech at £2bn, digital bank Monzo is struggling under the economic pressures of the coronavirus pandemic.
Five years after Monzo was founded, and £340m in funding later, the startup unicorn is still failing to turn a profit.
According to Wired, Monzo’s company accounts show it has been burning through cash, losing £30.5m in 2017 and £47.2m in 2018. The startup has seen customer card take up reduce in the UK as well as abroad.
Now looking to secure yet another round of funding, the neobank suffered a 40% drop in its valuation. Monzo is seeking to raise between £70m and £80m in order to make it through the present crisis which is expected to cut its value to around £1.2bn. However, Monzo surprised the public by winning £1m, 96 seconds into the funding round from investors, according to Altfi.
In March, Monzo furloughed 295 staff under the Coronavirus Job Retention Scheme (CJRS), and April saw the closure of its Las Vegas customer support office, losing 165 US jobs.
Monzo CEO abandons ship
A week after the latest funding round was announced, co-founder and chief executive Tom Blomfield said he would be stepping down.
Blomfield will step back from running the startup and will assume a new role as president of the challenger bank. He will also waive 12 months of his salary while other senior Monzo managers take a 25% pay cut.
US CEO TS Anil is set to take up Blomfield’s mantle as UK chief executive while retaining his US position. Anil’s ability to oversee UK regulation and meet the eight hour time difference has been questioned in some quarters.
“I went through all the stuff I love about my job, and it was all the stuff I did in the first two or three years,” Blomfield told TechCrunch. “And I went through all the stuff that drains me, and it’s all the stuff I’ve done in the last two years, honestly. Things I think TS is awesome at.”
Sunday Times Rich List hit by virus
Along with Revolut founder Nikolay Storonsky, Blomfield made the Sunday Times Rich List for the first time this month at number 858 in the list. Blomfield’s fortune is currently valued at £140m, but this is based on Monzo’s optimistic 2019 £2bn valuation.
Storonsky easily surpasses Blomfield, coming in at number 361 with personal assets of around £363m. Monzo co-founder Peter Rippon also made the list at 982 with £120m. Rippon left Monzo earlier this year, announcing on Linkedin that he had stepped down as deputy chief executive to spend time with his wife on their alpaca farm in Northumberland. Monzo chief credit office Tim Trailer has also jumped ship to join Capital on Tap as chief risk officer.
According to Altfi, this month’s list of the 1,000 wealthiest Brits shows the coronavirus has lost Britain’s richest around £54bn. More than 60 of the organisations whose executives feature on the list have furloughed some of their staff under CJRS, 20 of which are among the UK's list of billionaires.