Collison-backed digital bank Monzo could hit 1 million users 'in months'
Digital bank Monzo, who has the financial backing of the Collison brothers, could hit 1 million users within months.
But the app-only bank, which has already reached 750,000 users and is valued at $336m by its investors, needs them to do more than just sign up or encourage friends to join in order to "Monzo" one another funds and split restaurant bills.
The Irish brothers behind payments firm Stripe, Patrick and John Collison, contributed to a funding round for the UK bank last year.
In November 2017, Monzo announced that raised £71m from Goodwater Capital, Stripe and Michael Moritz in a funding round.
Earlier this year, the digital bank won approval from the Bank of England Prudential Regulation Authority (PRA) to offer its product in Ireland through the EU passporting facility.
"Passporting" is a European-wide arrangement that effectively mirrors regulation to help create a kind of financial services single market.
While the UK remains a member of the EU, Monzo is eligible to apply for additional rights for other member states - and Ireland was chosen first.
But to succeed in taking on the big banks, Monzo needs customers to treat it as their main account, where they deposit their salary and pay their bills.
At present only 1 in 5 of its users deposit their salary, with average balances of £1,400 per month, its chief executive Tom Blomfield said.
And popularity comes at a cost for Monzo, whose annual losses had more than quadrupled to £33.1m by February - when its user base stood it had around 500,000 users, its annual report released on Monday shows.
Blomfield said the bank could hit the million user mark by September or October. To make money, it hopes to use their spending data to nudge its customers towards third party products or services and to take a commission every time it is successful.
It does this by tracking customer spending habits in order to understand, for instance, how moving to a different provider for services like energy can save them money.