Waking up at 3:45am, on the treadmill by 4am while going through emails, reading a book a day and finding time to meditate – that’s the myth of the superhuman startup founder. It would be “pointless even if it were true”, says Tom Blomfield, the 33-year-old co-founder of one of Europe’s newest unicorns – digital bank Monzo. Recently, the company raised more than £200m in funding and plans to expand into the US.
“It’s like, come on. I typically get up after 8am, I love to sleep,” laughs Blomfield as he sits in his Finsbury Square office. His downtime is spent playing Starcraft or cooking with his girlfriend. “I read these things and feel inferior for about a second, until I realise it’s bullshit.”
Blomfield has worked hard to find his zen. When he was younger, he put in 90-hour working weeks, edging close to a burnout. He founded his first company,, when he was 21, but failed to raise any money. His next venture, fintech startup GoCardless, struggled to get seed capital. He readily acknowledges that what he did was risk-free: “I went to a good school, went to Oxford university – I had an amount of privilege.” In the early days, the law graduate worked for about a year without a salary. “And I knew if I failed, I could just go live in my parents’ garage.”
After GoCardless, he served as chief technical officer at Starling Bank, now a competitor – which he left to found Monzo. “When we started four years ago, people said ‘You’ll never get any customers, it’s going to be impossible getting them to switch from a traditional bank, you’ll never make a dent’,” Blomfield recalls. Now, he says, he’s being asked whether he worries “that other banks are going to catch up”.
Monzo is a fast-moving target. The bank is currently acquiring 100,000 new customers a month, growing by roughly 1.2 million accounts each year. The runner-up is Nationwide, with about 900,000 new clients a year, although the building society pays each new customer hundreds of pounds as an incentive.
But legacy banks aren’t standing still. More and more are now offering services similar to Monzo, forcing their digital rival to keep innovating. That’s why Monzo came up with the option to “freeze” your debit card temporarily if a user suspects it is lost or stolen, instead of cancelling it. If found, it’s easy to get it working again. Major high street banks now offer the same feature.
Similarly, incumbents have started allowing online customers to track when and where they spend their money using Google maps. Finally, the digital bank recently introduced “gambling blocks” to help cardholders kick gambling addiction. Transactions at bookmakers are stopped before money leaves the account; Blomfield is certain that traditional banks will soon copy this move, too.
But he is not worried. Overall, he says, legacy banks won’t be able to follow Monzo because they are too focused on where the challenger bank is today rather than where it will be in the near future. Monzo is also inherently different, says Blomfield; indeed, analysts praise its transparency and the communities it developed for both customers and software developers. On the bank’s forum, users can vote for new features, which prompted the name change from the original Mondo to Monzo, and help the startup determine an acceptable fee for cash withdrawals. And then there’s the financial inclusion feature that Blomfield says he’s particularly proud of, which allows people without a fixed address to open a bank account, even refugees.
Blomfield says that Monzo will co-exist with legacy banks, but he hopes his bank will become a personal finance hub where customers manage their mortgage and savings accounts along with products from other banks.
All Monzo customers now have current accounts by default, as opposed to the prepaid cards the company originally launched. Back then, in 2015, the coral-coloured card was especially popular with travellers, as it offered free cash withdrawals abroad. That ended a year ago, when Monzo capped free withdrawals at £200 a month (after which a 3 per cent fee applies) and moved cardholders to its new current account.
While Monzo is a experiencing fast growth, the health of the European fintech ecosystem has also helped its progress. “If you take Monzo, N26 and Revolut, three relatively similar products, we each had hundreds of millions of investments in one sector,” Blomfield says. “I can’t remember a time ever in the history of European technology where three companies have raised hundreds of millions in a single sector, let alone one company.”