The Sad Demise Of Europe’s Neobanks

The first warning came in June when the U.K.’s shining star neobank, Monzo, saw its valuation drop from $2.6 billion in June 2019 to $1.6 billion. The darker clouds of fintech foreboding gathered later in July as poor financial results exposed what they described as “material uncertainties.” While having grown to 4 million accounts, the regulatory responsibilities of running a bank cost time and money, and the pandemic smashed Monzo’s tiny trickle of revenue as the few pence pocketed with every coffee paid for simply dried up at a time when spenders have stayed in, and stayed safe.

But Revolut has a cash burning problem. Staff numbers rising from 633 at the end of 2018 to 2,261 by 2019 is extreme, even with over 13 million open accounts. With costs of $352 million, up from $120 million the year previous, Revolut has simply trebled the size of a loss-making business. The company’s deck hinted at it, in a slide from its April Town Hall, Revolut announced to staff that it had lost “operating leverage,” getting “fat and weak” in the process.

Read the complete article on Forbes

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2020-08-24T22:12:50+05:30August 24th, 2020|Categories: Banking & Finance, Digital Banking, FIAKS daily, Fintech & Technology|Tags: |Comments Off on The Sad Demise Of Europe’s Neobanks
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