Monday 17 February 2020 7:35 am

Monzo plans to relaunch paid-for accounts and hire another 500 staff

British fintech darling Monzo plans to recruit another 500 people as it targets 5.5m users this year and bids again to turn those numbers into a profit.

Monzo, which is valued at around £2bn, is set to relaunch paid-for accounts in the first quarter of 2020 after a failed introduction last year, when it reversed a rollout after complaints.

Read more: Monzo co-founder quits fintech bank – to farm alpacas

“We learned that things that seem a universal truth when you are 50 people, launching iteratively as no one is paying attention, when you do that with 3.5m customers it’s foolish,” chief executive Tom Blomfield told Reuters.

The digital bank so far counts 3.8m customers but reported a £47.2m loss in 2018, up from £33m in 2017. It is now in talks to raise between another £50m and £100m.

New and existing investors are included in the fundraising talks, which could precede a larger round next year. 

 “Our real focus is on monetisation,” Blomfield said. “We’re looking to drive revenue and do it in a way that’s transparent and fair.”

Read more: Monzo closes in on £100m funding round

He also told Reuters that he plans to bring the staff headcount from 1,500 to 2,000 people in 2020 as the startup eyes more growth. Staff are currently based in London, Cardiff and Las Vegas.

It currently loans £120m on deposits of around £2bn.

Monzo is also targeting a profit before a mooted float on the public markets in three to four years’ time and is expanding in the US.

Blomfield said Monzo would learn from N26’s withdrawal from the UK last week, which the German banking startup blamed on Brexit.

“In the US we are laying the groundwork, but not looking for explosive growth,” he told Reuters.

Read more: RBS to rebrand as Natwest as bank posts £4.2bn profit under new boss

“The lesson there is if you take a product and just move it across unchanged it doesn’t do well – N26 didn’t connect.”

Last year the bank’s attempt to trademark its “hot coral” colour was rejected.

The bank now accounts for more than half of the digital challenger bank market, up from a 35 per cent stake in April 2018.

Main image of Tom Blomfield, credit: Monzo