Monese reduces losses by 18 per cent to £31m, helped by cost cutting

Monese has reduced its losses by 18 per cent year-on-year to report a £31.1m loss in 2020, helped by a cut in marketing and customer acquisition spend and job cuts.

The digital banking service reported revenues of £16.3m in the year ending December 31 2020, up from £10.3m the year previous.

It said its uptick in revenues was driven by an increase in customer numbers, primarily in the UK.

Monese CEO and founder Norris Koppel said that 2020 was "not an easy year" but the fintech was going from "strength-to-strength".

Monese, which operates across 31 countries providing multi-currency accounts, posted its financial figures at the end of January this year.

Losses came in at £31.1m, compared to a £38m loss the year previous. 

Monese said that “additional losses are anticipated”.

In its results, Monese said: “While additional losses are anticipated as the business continues to grow, the directors believe that the company will continue to be able to access funding to support these anticipated future losses and growth investment on account of the company’s business performance to date and its prospects.”

On its reduced losses, Monese said administrative expenses had been reduced from £34.4m to £27.4m.

This included a significant cut in marketing and customer acquisition spend, a cut in fees paid to professional advisors and lower costs compared to the previous year.

It said: “The reduction in marketing expenditure was undertaken to reflect caution at the start of the Covid19 pandemic and to focus more resources on the development of the products and technology platform, decisions which are now bringing significant opportunities in 2021.

“Additionally in mid-2020, a number of roles were restructured resulting in a reduction in overall headcount and ongoing cost savings.”

Headcount in the year was reduced from 397 to 312.

It said during the year, Monese increased its equity by £30.5m after converting loan notes and at the end of the year, it had £19.2m cash in hand.

During the year, Monese entered a strategic partnership with global payments giant MasterCard to exchange local banking across Europe.

The two companies are hoping to better serve the underbanked through the collaboration by providing greater access to banking services and electronic payments. 

In its results, Monese said that amid Covid restrictions, staff, where possible, worked from home and that Monese was now running a hybrid working model.

Last year, Monese agreed its first takeover, snapping up Trezo, a fintech that offers a subscription-based income smoothing product for self-employed workers.

Aimed at gig workers, Trezo operates a membership model that also includes personal accident insurance and income advances.

Separately, Monese today announced the appointment of Anastasios Economou, the founder of investment holding company iGroup, as a non-executive director.

Koppel said Economou’s “extensive international leadership experience, deep expertise in markets and investments will be invaluable to Monese”.

Commenting on the results, Koppel said: “2020 was an extraordinary year, it kick-started significant changes in how we live, work and consume. Monese's mission is to empower ambitious people with untraditional lives and work - gig workers, side-hustlers, hard workers and heavy lifters. This has become more important than ever before. “Throughout 2020 we kept a sharp focus on delivering strong unit economics, increasing operational efficiency and building our core platform technology, in order to be ready for the next stage of our growth.

"Our customers were agile and resilient. They stayed loyal to Monese during the pandemic, and this paved the way for significantly increased revenues. “2020 was not an easy year, but I’m very proud of how we responded and adapted to the challenges. We have gone from strength to strength.”