Feb 12, 2021

Carol Nelson becomes new CEO of digital bank Monzo US

Monzo
CarolNelson
JPMorgan
digitalbank
William Girling
2 min
Carol Nelson becomes new CEO of digital bank Monzo US
In the latest development of an already busy month for Monzo, the digital bank has appointed Carol Nelson as its CEO for US operations...

Nelson had previously been working as a Strategic Advisor since 2019 as part of the company’s planned US launch. Her significant experience includes over 20 years as a Bank of America executive, CEO/President/Director of Cascade Bank, CEO of the Washington State Department of Revenue, and much more.

The appointment will doubtlessly be reassuring to Monzo’s stakeholders, particularly in light of Founder and President Tom Blomfield’s departure in January. The headquarters for Monzo US will be in San Francisco. 

Monzo seeks to raise £50m

Monzo’s customer base in its native UK has reached almost five million and 20,000 people have reportedly already signed up to the bank’s waiting list in the US.

With such strong support, it is perhaps unsurprising that the bank is poised to secure an additional £50m (US$69m) - a near-equivalent figure to the £60m netted during a Series G round in December 2020. Backers are said to include Novator, Kaiser, and newcomer Octahedron Capital.

The outcome of this funding round and Monzo’s US expansion could prove pivotal: reports that the digital bank lost over £100m last year have called its long-term profitability into question, with some commentators comparing its situation to failed Australian peer Xinja:

“Xinja did not prioritise early on trying to create a sustainable future with revenue-generating products, and it was too late when it finally dawned that it needed personal loans and wealth services instead,” said Katherine Long, Banking Analyst at GlobalData.

Digital banking takes hold globally

The success of digital banking is plain to see all over the world, from Nubank securing $400m in its latest funding round, to Cashplus achieving full bank status, and even US Bank digitising its lending for homebuilders.

Late January also saw JPMorgan launching a new digital brand (‘Chase’) in the UK, a move that Gordon Smith, CEO of Consumer & Community Banking and co-President, stated was designed to bring a challenger bank-style experience to a bank with over 160 years of history.

“We are bringing Chase to the UK because we want to provide customers with a new banking choice – one that will enable them to benefit from a simple and exceptional banking experience, built on the significant capabilities of JPMorgan Chase,” he said.

Image: Carol Nelson (source)

Watch out for our Top 100 women in fintech list, as voted by our readers - released in March 2021.

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Jun 10, 2021

Marqeta’s IPO shines a light on fintech fees

Fintech
IPO
Banking
Payments
2 min
Shares of payment processing company Marqeta closed up 13% after its market debut Wednesday on the Nasdaq

Marqeta, a fintech company, raised $1.2 billion with an initial public offering that priced high and exceeded expectations. The company priced its shares at $27, above the expected range of $20 to $24, and giving it a market valuation near $15 billion. Marqeta stock jumped 13%, closing at 30.52 on the stock market today.

This IPO adds to a number of recent fintech listings from companies such as the online lender SoFi and the no-fee brokerage Robinhood.

Founded in 2010 and based in Oakland, California, Marqeta sells payment technology that’s designed to detect potential fraud and ensure that money is properly routed. The company also creates customised branded debit cards and prepaid cards for corporate customers that include the delivery group DoorDash and Swedish fintech Klarna, as well as Square.

A large amount of Marqeta’s revenue comes from interchange fees, which is the transaction fee that merchants pay whenever a customer uses a credit/debit card to make a purchase. Due to the Durbin Amendment in the 2010 Dodd Frank Act, banks that have under $10bn in assets receive higher interchange fees than larger lenders from the transactions. 

This has allowed fintech start-ups, such as Marqeta and Chime, which is a personal finance app in the US, to take advantage of this by partnering with small banks and taking a cut of the fees. 

An increase in profits

Marqeta’s business has drastically increased during the pandemic as people in lockdown have turned to digital financial services such as Square’s Cash App and ecommerce companies such as DoorDash. The company more than doubled net revenues to $290m last year while narrowing losses to $48m. Business from Square made up 73% of Marqeta’s net revenue in the first quarter, which was an increase from the previous year. Marqeta’s agreements with Square last until 2024, according to the company.

Ian Johnson, SVP, Managing Director, Europe, Marqeta: “As the world becomes increasingly interconnected, more people are relying on digital payments to move through each day. Companies throughout Europe are looking for ways to offer better payment solutions for their customers. Marqeta is proud to be a publicly traded company and looks forward to bringing an even greater focus to scaling our products and delivering modern card issuing that launches cards quickly and provides greater flexibility than traditional card programmes. We’re pleased to support European businesses with ambition and purpose who use our platform to help write the future of payments.” 

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