Exclusive: Moneybox mothballing crypto launch. Will other fintechs follow?
A year after AltFi revealed Moneybox’s crypto ambitions, the company says it is ‘de-prioritising’ its crypto plans for now, owing to changing market conditions.
Moneybox is putting its plans to launch crypto on ice.
The digital investing and savings app is one of the original UK fintech success stories. Founded in 2015, and launched in 2016 it brought ‘round ups’ to the UK. A feature pioneered by Acorns in the US, which acted as a highly successful ‘wedge’ product that allowed it to expand to be a one-stop shop for pensions, ISAs, cash savings and more.
Therefore, when it was revealed - exclusively by AltFi - last year in April that it was planning to launch a crypto product it came as no surprise.
However, not long after crypto began to face an ongoing period of existential crisis initially dubbed as just another ‘crypto winter’ but which eventually began to snowball to bring down one of the largest fintech platforms in the world FTX.
Moneybox, which counts more than 1 million people as customers and £4bn in assets under administration, is now “deprioritising” its crypto launch.
Ben Stanway, co-CEO and co-founder of Moneybox, told AltFi in an email statement that crypto plans had been deprioritised for now due to the ongoing cost of living challenges facing consumers as well as volatility across the investment landscape.
"Over the last 12 months, significant market volatility has affected how consumers are choosing to invest their money and while crypto remains an option on our product roadmap, its integration into the Moneybox investment proposition has been deprioritised,” he said.
”At Moneybox we are committed to helping people build and grow wealth throughout their life and most recently, our focus has been on helping our customers make progress toward their financial goals while navigating changing market conditions with greater confidence,” he added.
The company, which employees about 300 people, appears to have still been supportive of crypto by September last year when it submitted evidence to a UK government consultation on the future of crypto regulations.
"Moneybox strongly believes that regulation would be of significant benefit to crypto-asset providers and consumers. Interest in this asset class is growing and rather than being a niche investment for hobbyists, crypto-assets can have a place within a diversified investment portfolio, provided they are subject to regulation in the same way as other high risk investment classes, as this will help to protect the consumer from the potential volatility of cryptocurrency," the company said in its written submission.
Moneybox had revealed its plans for crypto investing just after it raised a £35m Series D round. A few weeks later this figure was extended by a further £4.9m via a crowdfunding round backed by retail investors on Crowdcube.
Central to the raise was a plan to launch its first financial planning service, expanding its range of ETFs, as well as introducing crypto-investing, Stanway told AltFi at the time of the first stage of the round when the story was broken.
“We're going to be expanding [into crypto] through the lens of diversification, not through the lens of speculation,” he said, later clarifying giving holding “a couple of per cent” in Bitcoin as part of a larger portfolio.
“So very much like long-term financial wellness, and diversification oriented. If customers want to buy today and sell tomorrow, there's a lot of platforms out there that will facilitate that,” he said.
“We will not be a good place for people to speculate on cryptocurrencies,” Stanway said.
While not going as far as to say the company is ruling out crypto launch in the future, Stanway has highlighted how quickly things have changed in the crypto world compared with this time last year.
Boom and bust
Crypto’s soaring prices went largely unnoticed by most people until the pandemic. It was in later 2020 and throughout 2021 that changed things.
The price of Bitcoin jumped 600 per cent in the five months between October 2020 and March 2021, only to crash spectacularly over the following three months. The summer brought another bull run as investors piled into crypto assets as excited about the potential for the metaverse and web3 and sustained interest from institutional investors.
The likes of Tesla had announced it had procured $1.5bn of Bitcoin for example and was looking to accept it as a form of payment, which is yet to materialise.
Many firms around this time in the fintech world, which had largely kept itself clear of crypto announced plans to launch crypto offerings. These include Scalable Capital,Nubank,Curve,Plum,N26 and Lydia.
This was made easier by more fintech infrastructure companies launching to help fintechs quickly launch crypto products. Bitpanda, originally a crypto platform that later moved more into traditional areas such as stock trading, launched a dedicated B2B arm that powered both Plum and N26’s crypto products for example.
This flurry of activity coincided with a growing string of crypto scandals such as Luna, Three Arrows Genesis and of course FTX.
It is this change in market conditions which is central to the quandary of whether ‘crypto is (still) table stakes’ for fintech.
“Our investment proposition is designed to help people easily build a diversified portfolio, optimised for long-term wealth generation together with the flexibility to adapt to personal interests and values,“ Stanway told AltFi this week.
“Despite recent turbulence in the markets, Moneybox consumer research has shown that consumer confidence in investing is increasing and Moneybox investing customers have chosen to invest 37 per cent more year over year," he added.
There is clearly huge money to be made in crypto. That much is obvious. But with a murkier market than one year ago, at least for Moneybox, the opportunities are elsewhere. For now at least.
This article has been updated to clarify wider market volatility was a key reason for Moneybox to de-prioritise its crypto launch plans, not just volatility within the crypto markets. 27.04.23.