UK digital bank Monzo experienced record revenue growth in 2022, setting it on course to achieve annual profitability by the end of 2023, according to an investor update seen by Sifted.
Annualised revenues shot up 250% to £440m in the twelve months to December 2022 — a huge uptick from the 92% revenue growth to £154.2m that the neobank reported for the year to February 2022.
Monzo now expects to break even this year — achieving a status that has, up until now, been extremely rare among Europe’s neobanks.
The bank has been “cashflow positive” — ingoings have outpaced outgoings — since October 2022, according to the investor update.
The neobanks grow up
Rival Starling became the first European neobank to hit annual profitability in July last year, after revenue grew 93% thanks to a surge in lending. Meanwhile, Revolut CEO Nik Storonsky recently told Sifted that his fintech has been profitable for two years — a claim we’re having to wait to validate, since Revolut missed its deadline for filing accounts twice.
Monzo’s revenues are much more reliant on the usage of its famous coral pink cards. It recently hit 7m UK customers, putting it streaks ahead of its peers; Starling has 3.5m UK customers and Revolut has 5.75m.
Monzo said its personal account sign-ups averaged at 150k a month in 2022.
The comeback kid
It’s a sharp turn of fate for Monzo, whose auditors expressed “material uncertainty” over its ability to survive as a business as a going concern in its 2020-21 annual results. Since then, Monzo has almost doubled its customer numbers in the UK, from 3.9m in February 2020 to 7m today.
As central banks have continued to hike interest rates, UK retail banking customers switched banking account providers at a record rate in the final quarter of 2022, according to data from the Current Account Switch Service. After Santander and HSBC, Starling was the UK retail bank that logged the highest net switching gains at 9,070 switches, followed by Monzo with 6,030.