Tom Blomfield was ready. He stood in front of his screen. On the other side, 1,500 people were waiting for him. The co-founder and CEO of Monzo had an important announcement to make to his team.
For over a year, his mental health had been declining. The pressure, the pace, the responsibilities. He couldn’t take it anymore. He had tried to talk about it with those around him. His investors, his board, who were always understanding. But the answer was often the same: “Come on, just hang in there for a few more years, you’ll be fine.” At some point, it was no longer about years, or even months, but weeks.
On May 20, 2020, Tom had made his decision and was about to announce it publicly: after five years leading the British neobank, he would step down as CEO and take on the newly created role of President.
That way, he could focus on what truly drove him. The community, talking to customers, working on the company’s vision. Most of all, he could step back and recover from five years of incredible intensity.
***
Monzo wasn’t the first successful fintech Tom launched. In January 2011, he and two of his Oxford friends, Hiroki Takeuchi and Matt Robinson, met in a North London pub to discuss business ideas. At the time, all three were working as consultants. Tom’s first suggestion was a dating app — Tinder didn’t exist yet, so it could have been a good move — but his two friends turned it down. One idea, however, quickly caught their interest: making it easier to manage shared expenses.
They dug into the idea and, a few weeks later, flew to San Francisco. Their goal was to join the famous Californian accelerator Y Combinator. The interview didn’t go as planned, as the three co-founders gave contradictory answers throughout. But the panel believed in the market and saw huge potential. A few hours later, the news came in: GrouPay had been accepted into the three-month program and granted $150,000 in funding.
In Silicon Valley, the three young Brits discovered a completely different world. The level was several notches higher than they had expected. Ideas, execution, everything moved faster. You could bump into Mark Zuckerberg giving a talk in a YC hallway. “When we were in London, we were play-acting at launching a startup,” Tom admits. Before long, the young fintech pivoted to B2B and became GoCardless, with the ambition of making it easier for businesses to collect payments.
By summer 2011, GoCardless had obtained its payment institution licence. Just one week before demo day. It was the perfect timing to secure investment, and it worked: Accel led the company’s first funding round. Shortly after, GoCardless signed its first customer.
Back in London, growth was slow. In its very first month, the startup processed just £360 in payments. The goal of reaching £1 million within nine months was missed. Growth eventually took off a few months later, but after three years, Tom began to question things. Payments weren’t his passion, and he couldn’t see himself doing this for the next decade.
In 2014, he decided to move on.
Gocardless kept going and was valued at $2.2 billion in its latest funding round in 2022.
***
As a nod to his abandoned dating app idea, Tom joined Grouper in New York for a year as VP Growth. But it’s in 2014 that things would take a decisive turning point.
Anne Boden, co-founder and CEO of Starling Bank, had met Tom a few years earlier at a dinner. The former banker, in the process of building a team to revolutionise the industry, invited Tom to join as CTO. He accepted. I doubt either of them expected things to descend into chaos so quickly.
“Spying, defections and regrets: Inside the bitter feud between Starling Bank and Monzo” — the Telegraph was still running such headlines five years later. I won’t go into the details of the clash between the CEO and CTO that kept the media buzzing for years. Quite simply because I don’t know what really happened — very few people do I guess — and I dislike the bad habit of making claims without knowing the facts. In this case, the two sides tell different stories: one speaks of a resignation followed by unfair dismissal of the team, the other of an attempted coup. I’m not in a position to take sides. What I can tell you, however, is how it ended.
In 2014, Starling Bank was in talks with Passion Capital, a European VC, to raise its first funding round. This was crucial to, first, hire top talent, and second, secure a banking licence. But after disagreements between Anne and Tom, things took a different turn.
Tom persuaded Passion Capital and the Starling Bank employees who had been dismissed alongside him to join him in a new venture. He now had both the funds and an experienced team to go after a banking licence.
In 2015, Tom Blomfield, Jonas Huckestein, Jason Bates, Paul Rippon and Gary Dolman launched Mondo.
***
Mondo, renamed Monzo a year later, didn’t join Y Combinator. But the spirit of the Californian accelerator was there when the five co-founders set out on their journey. Tom went back to all his notes from his days on the West Coast: “launch early,” “talk to users,” “do things that don’t scale.” In less than four months, the first prototype of the bank was launched with a prepaid debit card. Success came quickly, unlike the early days of GoCardless, and in February 2016, Monzo pulled off the fastest crowdfunding in history: £1 million in 96 seconds on Crowdcube.
Choosing crowdfunding perfectly reflected the neobank’s strategy: build a community and take the opposite stance to traditional banks. It was bold. When I talk to many fintechs in the banking sector, the message is often cautious. They want to disrupt, but not in a way that feels too modern, too different. They’re afraid of “not looking serious.” Back in 2015, 2016, 2017, fintech was just starting to be seen as credible, and technology was just beginning to disrupt banking. More transparent, simpler, more fun with a coral-coloured debit card. That was the Monzo spirit, and it was all the more courageous to take that path so early. And guess what? People loved it. In October 2018, the neobank, which had obtained its banking licence the previous year, reached one million users. Without spending a penny on marketing, simply through word of mouth.
Tom credits Monzo’s success partly to its huge ambition of building a bank from scratch: “It’s somewhat counterintuitive, but taking on a really hard problem actually makes some things easier. The smartest, most ambitious people want to come and work with you because they know that’s where they’ll find other smart, ambitious people. The press wants to write about you because you’re doing something so big. And customers want to sign up because you’ve got this bold, ambitious vision and they’re excited to be part of it.”
But with success, especially in a regulated industry, comes great responsibility.
***
On October 17, 2019, something unusual was happening in front of Monzo’s headquarters. A film crew arrived, cameras were set up, and a mysterious one-metre-high object was placed in the middle of the street, covered with a black sheet. A man in grey jeans and a green parka — no, not Liam Gallagher — appeared. After a few seconds, he whipped the sheet away. Revealed was a giant block of ice, inside which a Monzo card had been carved. “What’s going onzo, Monzo?” exclaimed the journalist. The video quickly went viral across the country. It was the BBC.
In recent months, Monzo, following regulatory requirements, had stepped up its monitoring of illegal activities such as financial crime and money laundering taking place on its accounts. When suspicious activity was detected, the account would be frozen — hence the ice sculpture — and no transactions could be made by the user. It reminded me of my years at HSBC, where a single suspicious transaction could get an account blocked. Sometimes it was justified, sometimes not, and regulatory processes, often long and far from modern, didn’t help. Take it from me: customers don’t like it.
As expected, the backlash was intense. Some people threatened to throw acid on employees in the office. A Facebook group was created to find Tom’s home address. He had to change his phone number and email address. And, as Tom put it, “It was only problem number seven in the stack rank of all the things I was worried about.”
The heaviest burden for the young entrepreneur was responsibility. The neobank was processing billions in payments, and even the smallest glitch could throw the whole system off. An outage lasting only seconds could have a major impact on people’s lives. And of course, those outages did happen.
Despite the challenges, Monzo’s growth kept climbing. Its revenue reached £3.5 million in 2018 and rose to £19.7 million in 2019. Profitability, however, moved in the opposite direction, with losses widening from £30 million to £47 million. Still, the company had raised significant capital. It sparked a lot of debate, but it’s a common pattern and one that has proven successful for many fintechs that are profitable today.
***
In early 2020, Tom had just spent the past nine months travelling the world to convince investors. Some funding rounds had been quick, like the one that made Monzo a unicorn. Others took much longer, like this one, where Tom was told “no” 96 times. It had taken months to negotiate a £100 million round, but two Canadian pension funds had finally agreed to lead it. It was an important one, given the company was burning through £100 million in cash per year. The paperwork was ready. The meeting was set for Monday morning. But over the weekend, the unexpected happened: the world went into lockdown. Tom’s phone rang. “The investment committee said ‘every investment on hold’. We’re not doing the investment. We’re out.”
The blow was double. Not only was this cash, vital for the company, gone, but Covid also hit the neobank hard. A large part of Monzo’s revenue came from customers using their cards overseas, and revenue dropped by 50%.
The regulator advised Tom and his leadership team to prepare for the company to shut down. But through determination, the hard work of the teams, and securing funding a month later from existing investors causing a significant down round, the company gained some breathing room to bounce back.
Tom was exhausted. For several years, he had been sounding the alarm about his health. This time, the moment had come. In May 2020, he handed over the CEO role to TS Anil, then CEO of Monzo US, and took the role of President. He could finally breathe again, though not without a certain sadness and guilt.
He left Monzo for good a year later with one powerful lesson: “Showing your emotion, your vulnerability, your screwups, is such a powerful way to inspire followship.”
***
Ten years on, the neobank is still growing at a rapid pace. Monzo now has over 13 million customers: 12.5 million are personal banking clients, that’s 20% of the UK population, and 700,000 are businesses. Its revenue stands at £1.2 billion, up 48% from the previous year.
As for Tom, he has moved on to new pursuits. After a year spent recharging and refocusing, one of his former investors reached out in 2022. The firm had just invested in a fintech and wanted to bring Tom into the round. He also suggested Tom speak with the founder of that fintech. Everything Tom had experienced at GoCardless and Monzo was an incredible source of insight. During that conversation, Tom’s entrepreneurial mind came alive again and he decided to embrace this new hobby. He became an angel investor and made 75 investments in the following nine months.
Tom is now a General Partner at Y Combinator, back to doing what he loves. No, not running all-hands meetings in front of 1,500 people, but solving big problems alongside talented entrepreneurs.
Credit to my main sources:
Monzo reports
Behind every founder is a collection of defining moments and hard-earned lessons. As a ghostwriter, I help you shape them into stories people remember, share, and trust. Let’s talk.
Thomas