Monzo, the UK-based digital bank, is on the path to annual profitability by the end of 2023.
The neobank has experienced a significant increase in revenue over the past year, according to an investor update seen by Sifted.
Record Revenue Growth
Annualised revenues for Monzo rose 250% to £440 million in the twelve months to December 2022, a significant increase from the 92% revenue growth to £154.2 million reported for the year to February 2022.
Monzo now expects to break even in 2023, a status that is rare among Europe’s neobanks.
Cash Flow Positive
The digital bank has been “cash flow positive” since October 2022, meaning that its ingoings have surpassed its outgoings.
Monzo’s revenue is heavily reliant on the usage of its famous coral pink cards, with 7 million UK customers, far ahead of its peers, Starling with 3.5 million and Revolut with 5.75 million.
The bank reported an average of 150,000 personal account sign-ups per month in 2022.
The Comeback Kid
Monzo’s success is a sharp turn of fate from the material uncertainty expressed by its auditors over its ability to survive as a business in its 2020-2021 annual results.
Since then, the digital bank has almost doubled its customer numbers in the UK, from 3.9 million in February 2020 to 7 million today.
Record Switching Rates
As central banks have continued to raise interest rates, UK retail banking customers switched 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 recorded the highest net switching gains at 9,070 switches, followed by Monzo with 6,030.
Monzo’s impressive revenue growth and expectation of breaking even in 2023 demonstrate its continued success in the neobank market.
Its strong cash flow and large customer base set it apart from its peers, making it a force to be reckoned with in the industry.