Monzo has achieved monthly profitability for the first time, a major milestone for the digital challenger bank as it narrowed its substantial losses for the 2023 financial year.
The London-headquartered fintech said on Wednesday that revenue for the year ended February 2023 increased from £154.2m to £355.6m.
While Monzo said it made a profit in January and February this year, annual losses came in at £116.3m – a small decrease on the net loss of £119m reported in 2022. Monzo said it is targeting full year-profitability by the end of 2024.
Monzo’s growth was fueled by an increase in lending and subscription revenues, with paid accounts now totalling 350,000. The company, which was founded in 2015 and secured its full UK banking licence in 2017, saw deposits grow by 34%, up from £4.4bn to £6bn.
It added 1.6 million new customers, bringing the total to 7.5 million customers and making it the seventh-largest UK bank by that metric. Card spend increased by 38% to £33.6bn.
Monzo added that revenue has reached £500m on an annualised basis, up from the £440m in annualised revenue reported in January.
TS Anil, CEO of Monzo, said: “We’re a stand-out player in banking and tech – and we’re firing on all cylinders to achieve our ambitions.”
He added: “It’s been a year of phenomenal achievements. Our customers sit at the heart of everything we do and we’ve seen growth across all areas of the business as they turn to us to improve their financial wellbeing and transform their relationship with money.”
Monzo’s financial results follow a turbulent period for the company during the pandemic, in which founder Tom Blomfield stepped down and the fintech withdrew its application for a US banking licence. However, the company has said it is still planning to expand to the US.
Gary Hoffman, chair of the Monzo board, said: “Our ambitions also go beyond the UK and in the next phase of our growth we’ll re-focus on growth in the US market with a new leader at the helm. And closer to home, we’ll be exploring opportunities to bring Monzo to more people across Europe.”
The company raised $500m in funding in December 2021. Hoffman said the company isn’t “ruling out fundraising in the future, but it means we’ll only do it if we see an exceptional opportunity that we want to grasp if and when the market conditions are right”.