Monzo missed out on crypto and stock trading, says founder Tom Blomfield

In 2011, a twentysomething Tom Blomfield and two of his friends joined Y-Combinator to workshop their idea for a payments startup. It was called Groupay and was “not a good idea,” he says.

“If I’m honest the quality and progress of the companies is now so high, I don’t think I would get in today,” laughs the former neobank exec, now on the other side of the table as visiting group partner at the accelerator. “I’m not even sure I would accept me.”

That so-called bad idea came out of the other end of the YC conveyor belt as GoCardless, a payments startup now shy of a $1 billion valuation. 

Blomfield would leave the startup in 2015 to launch Monzo, the neobank valued at $4.5 billion after its latest $500 million funding round. He would later resign, citing mental health problems. 

He’s proud of the legacy he’s built. Blomfield is quick to point out over video call that there are now 6 million customers in the UK using Monzo, meaning more than 1 in 10 adults use its “hot” coral cards. Despite a valuation that pales in comparison to competitors Revolut and N26, it was these quirky pink cards, along with budgeting tools and payment notifications, that made it a fast fintech favorite for UK millennials.  

Now, fresh from a holiday waterskiing in Antigua, the founder-turned-investor is reflecting on his time at the neobank — and sharing his thoughts on his new role at Y-Combinator. 

Missed the crypto boat? 

“There are regrets like not monetizing as well [as we could have] and missing out on stocks and shares trading and potentially crypto trading,'' Blomfield admits. Max Tayenthal, founder of fellow challenger bank N26, shared a similar sentiment in a recent interview with the Financial Times. 

He explains that he always wanted to add a full range of services to Monzo to create a financial super-app — with crypto, trading stocks, pensions and even supermarket loyalty points on his wishlist. 

“I think if we added crypto three years ago, we would have clearly made a lot of money,” says Blomfield. “This was one thing that Revolut did well — they monetized better and earlier.”

”I feel like we only got 10% there,” he laments, in reference to the broader set of functionalities that Revolut has achieved. 

His dream for Monzo, however, could soon come true. The company is said to be exploring cryptocurrencies and is currently recruiting to launch an investment and wealth product. 

Meanwhile, Blomfield also admits that Monzo might have been too early to the buy now, pay later (BNPL) game — the current credit product favored by Millennials and Gen Z.

The neobank worked on a BNPL prototype in 2017 before launching its other credit products. He says it was called “spread-the-cost” and that it shared much of the functionality of the product that Klarna used to become Europe’s most valuable fintech. Ultimately, however, Blomfield says that the introduction of credit products was slowed down by regulators as the company leveled up from plucky challenger to a fully-fledged regulated bank.

Last year, Monzo finally managed to launch its own BNPL product, now named “Monzo Flex” — four years after the prototype plans. 

New products like these doubled revenues for the neobank this year, helping it to attract the interest of a new lead investor, the Abu Dhabi Growth Fund — a sovereign wealth fund established to generate returns for the Abu Dhabi government.  

The founder turned angel 

But Blomfield is no longer in the Monzo c-suite in charge of procuring funding — a part of being a founder he has publicly admitted that he disliked. In July 2021, he exposed the “shitty” investors he’d met while raising funds on his blog, highlighting the behavior of a SoftBank partner that would pick his feet as he pitched.

Instead, alongside being tasked with finding the next Coinbase, Stripe and OpenSea at YC, he’s trying his hand at angel investing. He says that this allows him to put his time into passion projects not necessarily linked to fintech. 

“So for example, I just invested in a women's urinal,” he says. “And I think they'll build a great business, but I'm not sure it's going to be the next Google.” 

That’s not to say he’s bowed out of the London fintech scene completely. Blomfield has invested in London payroll fintech Pento, and he recently took his first fintech board position, advising innovative mortgage lender Generation Home. Last year, he made 78 angel investments. 

He says he is also set to make his first investments in blockchain technology, specifically looking at startups providing the underlying tooling for crypto and non-fungible tokens (NFTs). 

Blockchain skeptic 

He doesn’t personally own any NFTs or cryptocurrencies, though. In a previous interview, Blomfield described cryptocurrencies as “terrifying” and “massively overhyped” after dabbling with both ether and bitcoin. 

While his angel investment portfolio suggests he now has at least one foot aboard the crypto hype train, he’d hardly describe himself as part of the web3 cult. 

Web3 is a vision of an internet powered by blockchain and cryptocurrencies — a decentralized and user-owned iteration of the world wide web. 

Blomfield believes that ultimately, people want the convenience offered by centralization, citing how self-custody, for example, opens up users to hacks and human error, such as forgetting one’s seed phrase. 

“I'm just not sure yet that crypto is really making money work for everyone,” he says. “Actually, I think a small number of young men — founders and VCs — are making astronomical amounts of money. It doesn't yet seem to be the great equalizer that makes everyone prosperous.” 

What makes more sense for him is a closed system using blockchain technology for interbank settlement with a currency akin to Ripple that can bypass central bank fees. He says this would be especially useful for cross-border payments. 

“I think it will have a profound impact on the world, but honestly, not in the way people believe today,” he says. “Fast forward 20 years [and] I don't think necessarily everyone will be transacting in a cryptocurrency.”