UK digital banking group Monzo’s European expansion is finally under way. But fault lines between a group of investors and the fintech’s board are threatening to complicate the push.
Monzo confirmed on Wednesday it has secured an Irish banking licence, and plans to use the Republic as a launch pad as it ultimately targets offering services across the European Union (EU).
Over the coming months, Irish customers will be able to apply for Monzo’s free personal, joint, business, children’s, and instant-access savings accounts. Each account will come with an Irish international bank account number (Iban) – similar to other mobile banks targeting customers in the State such as Revolut and N26.
The European Central Bank (ECB), which is ultimately responsible for banking supervision across the euro zone, has also authorised the Irish unit’s permit.
Dublin-based Monzo Bank Europe, which has about 35 staff, is led by former Stripe, Twitter and Google executive Michael Carney. Its chief financial officer, Nicola O’Brien, previously held the same role in PTSB.
However, Monzo’s long-awaited EU authorisation was overshadowed by a report in the Financial Times about how a group of shareholders in the privately-held group are pushing to oust chairman of six years, Gary Hoffman, and reverse the imminent exit of chief executive, TS Anil.
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Venture capital firms Accel and Iconiq are among investors – who reportedly hold about 40 per cent of Monzo’s shares – that are looking to reverse Mr Anil’s scheduled exit in February, amid disagreements about where and when the company should carry out an initial public offering (IPO).
Mr Anil and some investors are said to have been in favour of listing the business earlier than some on the board, who wanted time to grow the group’s valuation, which reached £4.5 billion (€5.1 billion) last year under its most recent fundraising round. He was also pushing for the IPO to take place in New York, while others argued in favour of London.
The report said that the tensions between investors and the board were threatening to destabilise Monzo, which has grown rapidly since it was founded by entrepreneur Tom Blomfield in 2015.
It is far from an ideal backdrop for a group – with 14 million domestic customers in the UK – as it seeks to expand and win business beyond its home market.