Should you buy Monzo in its next Crowdfunding round?
Several challenger banks have emerged in the United Kingdom, but Monzo is probably the most popular one. Built entirely from scratch onto a mobile native app, Monzo offers a series of improvements to traditional banks, such as notifications every time you make a purchase, and notifications when you have been overcharged for your underground journey.
Monzo has just completed a round of funding of almost £20 million, that values the company at £65 million. Monzo is combining this funding with a small chunk of crowdfunding, which will provide £2.5 million in additional cash. The plan is to double the staff from 85 to 170 once this funding is available.
Last time they went for a Crowdfunding campaign, they got their target of £1 million in 96 seconds, so this time, it appears that it will be over subscribed too. 1861 investors, maximum investment capped at £1000.
Should you invest? It might seem like a no brainer given the huge appetite for the equity experienced last time. We give you some pointers
Invest if:
- You believe the current valuation is still low. Last time there was a crowdfunding campaign, the company ended up being valued at £30 million, so it has grown in value by more than £10 million.
- You are a Monzo customer and love their app. Customer centricity is key to any company’s success so if you love it, there is nothing wrong in putting your money where your heart is
- You want to learn about Crowdfunding. This can be an exciting way to invest in Fintech, as not many financial technology companies become public, and by the time they do, the chance to earn big bucks is gone. Crowdinvestors have the same rights as Venture Capitalists.
Don’t invest if:
- You are highly risk averse. As with any startup, and especially fintech, there is a high risk that you might lose money out of your investment.
- You need a fast return on investment. It is unlikely that Monzo will have a quick exit, so you will need to hold the investment for quite some time.
- You have an expectation to become rich out of this investment. The investment will be probably be capped at £1000 so this will probably won’t make that much money.
Pre-registration for the crowdfunding will take place between 28 February and 14 March followed by a ballot to ensure fair access to wannabe investors, many of whom are customers.
