Monzo: The Bank That Fits in Your Pocket
Meet Tom Blomfield, a man who spent years on a quest for his true calling. But once he found it, or maybe - it found him - the world of smart baking never looked the same again! Accomplished, innovative, and downright oriented in creating something that served humankind a great purpose, Tom’s unicorn company, Monzo means business!
Otherwise known as the bank that fits in your pocket, Tom’s Monzo is a clean, slick, and beyond-useful platform in today’s overactive world of banking. With Monzo, you can do it all - split a bill, track your spending, and even save up for rainy days!
Not your everyday creator, Tom’s journey began as far from banking as possible. A seemingly simple man at heart, Tom never considered himself a business pundit, but if he knew how to do one thing right - it was to invent originally and with a purpose! Stick around for this one, as Tom’s journey in creating Monzo is the inspirational business fairytale we all need.
Jack of All Trades, Master of One
Hailing from Buckinghamshire, Tom was raised in an entrepreneurial family. His father built his first engineering company when he was only thirty thus, setting an example for Tom to follow. Admiring his father, Tom began learning programming languages at the age of nine. During his school classes at Dr Challoner's Grammar School, Tom nurtured other artistic passions such as singing and writing poetry. Although his writing skills were nothing short of impeccable, the school choir constantly rejected him for being tone- deaf.
While still at school, Tom threw himself into a more serious business - to build a beginner's guide for internet newbies and up-and-comers. However, for a boy of his age, this task turned out to be a hard bite to chew, so he was left with nothing else but pursue his programming and website design passion, at the unripe age of thirteen.
One year later, a local estate agent paid Tom over £250 for his beautifully designed website. Due to his inexperience, however, Tom couldn't get the database to work properly, so it was up to him to input all key details manually. Fortunately, his work was appreciated and he was paid £3 per hour, which at the time, seemed a suitable income.
Years have passed and the young intellectual decided to try himself in something totally different and new. In 2003, Tom began his law studies at Oxford University. During his studies, Tom and two of his colleagues participated in the Oxford Entrepreneurs Scheme, where they won a £1,000 prize as a seed business capital.
Considering building a platform similar to eBay, Tom and his colleagues launched Boso.com in 2004, in a year when the dot.com era was alive and kicking!
Missed Opportunities, Pathways to Others
Two years after its launch, Boso was spread around more than fifty universities in the UK. The trio, however, still struggled to raise money as most investors considered Boso’s team still unripe for business.
Tom's partners, Kulveer Taggar and Hiroki Takeuchi were both older than him, and therefore, shared more advanced dreams and visions. Having finished their university studies, Kulveer and Hiroki packed their bags and went to Silicon Valley to try their luck. Unfortunately, as Tom was still in his third year of studies, he passed on this opportunity and remained in England until graduation.
Knowing that he might have let a great opportunity slip through his fingers, Tom's last year of university was his hardest. While unwillingly pushing towards graduation, Tom spent most of his free time playing with computers.
As Boso turned out to be a million-dollar company, Tom saw an opportunity in this line of business and abandoned his mission of becoming a lawyer to initiate a career as a management consultant.
Whilst studying, Tom got his first job at OC&C, where he was solving various problems for companies, and acquired decent knowledge on how businesses operated, their pros and cons, and the effort it took these to make it on the market.
Upon graduating in 2007, Tom upgraded to an associate consultant at OC&C and remained with the company until 2011.
A Team of Intellectuals
In early 2012, Tom became sick and tired of working for others and envisioned himself as an individual entrepreneur. He contacted two of his friends and together, they built a payment tool for charities, newspapers and sports teams, called GroupPay.
Before the platform was even ready the trio found the first investor, Y Combinator. The investors were located in California so they had to fly overseas to bring the idea to life. With hard work, they managed to raise over $35 million and the company was soon catching the eye of various interested parties. In a few years, GroupPay was rebranded as GoCardless.
Out of all his experiences, the latter set the foundation of what was going to be Tom’s greatest success yet - a cleverly designed fintech company.
During his time at GoCardless, Tom learned that bank transactions weren't as complicated as he once thought. Nonetheless, to make them even simpler, he needed to think of a whole new and improved tool that does just that.
Selling his shares in GoCardless, Tom boarded the next flight home and got into action. In 2015, the serial entrepreneur finally understood the challenge of people having their finances spread across numerous applications. To solve the issue, Tom discussed gathering all these apps into one official platform, all the while collaborating with employees at Passion Capital, a then-venture capital firm. Since the team was familiar with Tom’s GoCardless work, they backed him up immediately and offered a helping hand in the platform’s further development.
In a month’s time, Tom recruited a perfect team of four, some of whom were still working for another financial company, called Starling Bank.
Jonas Huckestein, Jason Bates, Paul Rippon and Gary Dolman were intellectuals with massive previous experience in launching start-ups. Once the fivesome got together, the prototype of what was going to become a billion-dollar company entered its preparation phase.
The Launch of Monzo
The team of five worked tirelessly on developing something that could provide users with the security of a regular bank, but more convenient. After a painstaking period that much resembles quarantine but with a crunch-time level workload, the team launched Monzo in 2015.
Elaborating an in-depth plan, the five figured out that they will first need sufficient funds to get the business going.
Initially, the team took to CrowdCube to gather the funds, and in 96 seconds - yes, you read that right - the company had raised over £1 million! Aside from this magnificent funding, Passion Capital also contributed to the company with its own investment.
Sadly, banking regulations were quite strict then, and although the idea was close to perfect, obtaining the license for it was a real challenge for Tom and company.
Another obstacle the team faced was the brand’s fast-paced growth, which ultimately led to them doing most of the heavy lifting. The hard work paid off two years later, when the company presented 10,000 pages of documentation and, as a result, the banking restriction license was finally lifted.
Monzo welcomed a ravishing amount of £71 million in November 2007. The same month, another round of £878,100 crowd-funding poured into the company.
This funding was used to facilitate the process of users managing their application, thus enabling them to make the most of their money. The best part? None of this money was invested in advertising all due to the prompt word-of-mouth popularity and marketing.
Soon after, the team began hiring talented staffers that helped the company with problem-solving tasks, customer support issues, and everything in between.
General Catalyst, alongside Accel, invested £85 million in the company, in 2018. The same year, Monzo grew to over one million customers and was in need of additional headcount. This funding round not only helped Monzo develop its product line faster but also cover most of its operational costs.
The most significant funding, which valued the company to an incredible £2 billion, came from Y Combinator Community, alongside Latitude and Stripe, among others. The main intention behind this was for Monzo to start rolling out its products in the USA and break way onto international markets.
Monzo skyrocketed to over four million customers in 2020. During the same year, those customers spent no less than £11 billion at the company which brought its revenue to £36 million, and over 1,500 workers in the UK alone.
Tom's entrepreneurial mindset combined with his expertise and relentlessness facilitated banking for generations to come. Keeping this in mind, we cannot help but think about the power-message it carries along - to think big, learn from your failures, and always follow your guts!
Let’s call Monzo what it is - the bank of the future!