monzo announced this 2024 its financial results, revealing its first pre-tax profit of the year. The company also confirmed that it is in the early stages of expanding into the wider European market through a new base in Ireland.
The news comes shortly after the UK-based neobank raised a pair of significant tranches of funding, starting with $430m (£340m) in March, followed by another $190m last month with a valuation of $5.200 billion. An important part of this financing is intended to boost its expansion in the US market, which it has been trying to conquer for some years. Last October, the company appointed a new CEO for its US operations, poaching the global product head for Block's Cash App, Conor Walsh to lead its business development in the United States.
However, we know that Monzo eventually plans to enter closer markets as well, as the company looks for a "new gateway" in Ireland - this will mean a new office in Dublin - although it has not set a timetable for this plan.
Growth
Monzo reached profitability for the first time last March, a milestone driven by its credit product in a United Kingdom with high interest rates in the market. This trend continued for the rest of the financial year, with the company reporting pre-tax profits of £15,4 million which can be compared with a loss of £119 million in 2022 and losses of £116 million in 2023. Monzo also said its revenue rose 250% to £880 million last year.
In the report, Monzo chairman Gary Hoffman acknowledges that an early drop in interest rates could impact its performance over the next 12 months, pointing to “external uncertainties” that may “create volatility” for the sector. banking as a whole.
“The UK has just emerged from a technical recession, economic growth has slowed significantly and growth in the UK economy is expected to remain sluggish even as interest rates begin to gradually fall,” Hoffman notes. "While these risks could impact our performance and plans, I believe we are firmly positioned to not only withstand these potential headwinds, but also to thrive in the face of them."
Overall, it's been pretty positive news for neobanks lately, with Monzo's UK rival Revolut recording its first full year of profitability last year. Brazil's Nubank has also been booming, with its valuation rising to an all-time high of $58 billion this year, following a swing from a net loss of $9 million in 2022. to net profits of $1 billion last year.
Monzo, meanwhile, has also seen its customer base increase by more than 2,3 million to 9,7 million, including 400.000 business customers. The company said it hopes to increase its number of customers to 11 million next year.
