Monzo plans to hire 500 new employees and launch paid premium accounts this year
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UK neobank Monzo plans to increase its headcount to more than 2,000 this year, up from its current 1,500, said Monzo founder and CEO Tom Blomfield, per Reuters.
Additionally, the neobank plans to launch paid premium accounts this quarter, implementing lessons it claims to have learned after a failed attempt to do so in April 2019 - it shuttered the service just five months later.
The neobank is pushing for stronger monetization as it seeks to reduce losses and move toward profitability. Monzo reported a heavy loss of £47.2 million ($61.4 million) in 2018, a sterling example of the struggle to turn a profit that is almost ubiquitous among neobanks. And while it's reportedly in talks with new and existing investors to raise between £50 million ($66 million) and £100 million ($131 million), external capital will only get neobanks so far.
Monzo seems to be bearing this in mind, as Blomfield told Reuters that the bank's "real focus is on monetization," and that it seeks to "drive revenue and do it in a way that's transparent and fair." The neobank's upcoming premium accounts will be part of that effort, as will efforts to grow its loan book - Monzo currently lends out around £120 million ($156.1 million) and holds deposits of £2 billion ($2.6 billion), per the outlet.
Monzo has had its struggles, but it could ride a burst of momentum following the exit of German competitor N26 from the UK. Monzo's last attempt at premium accounts failed after a flurry of negative feedback, and the neobank has taken fire from many customers who have complained of account lockouts recently, per Reuters.
But the exit of N26 from the UK is giving a boost to the UK's homegrown neobanks: Monzo, Starling, and Monese all reported surges in transfers and customers following the German neobank's announcement that it would close all UK accounts and withdraw from the market due to Brexit.
With this sudden influx of customers, Monzo has a chance to pitch its new premium accounts and loan offerings to a wider base of customers. And given that the neobank enjoys a great deal of positive word of mouth - it was ranked the brand in Britain most likely to be recommended to a friend, per a YouGov survey cited by Reuters - Monzo's new premium account offering could catch on quickly if it is well-executed.
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