Monzo cofounder Tom Blomfield is stepping down as chief executive of the UK challenger bank in the latest sign of the turmoil that the coronavirus pandemic has wrought on the fintech sector.
The London-based startup unicorn, which has seen remarkable growth and won legions of fans, has in recent months been hit by a series of high profile departures and is facing a 40% drop in valuation at its next funding round amid a gloomy economic backdrop.
Blomfield will now take up a newly created role of president of the challenger bank, meaning that he will be stepping back from the day to day operational running of the bank. It is as yet unclear if this was triggered by conflict at the bank, pressure from investors or other reasons.
In an interview with TechCrunch, which broke the story, Blomfield said he wanted to spend time “doing the stuff I really really love, which is community, talking to customers, helping develop the product proposition, long term vision… and try to unwind my involvement a little bit in more formal regulated banking activities”.
Following the move, the current US Monzo chief executive, TS Anil, will become the new Monzo UK Bank chief executive, subject to regulatory approval, and for now will hold both UK and US roles, TechCrunch reports. Anil previously held exec roles at Visa, Standard Chartered Bank and Citi.
Anil will have to navigate rough waters at Monzo over the coming months, however.
Sifted reported last week that Monzo is in the market looking to raise £70-80m in extra funding, but is now expected to raise the money at around a 40% discount from the £2bn valuation it raised at last June amid worries about the impact of coronavirus.
At the same time, there has been an exodus of senior leadership. Just this week Monzo’s chief credit officer Tim Trailor, who joined the business from Klarna in August 2018, left to take up a new role at lender Capital On Tap. Former chief operating officer Tom Foster-Carter, former deputy chief executive Paul Rippon, former chief technology officer Meri Williams and a handful of other founding employees have also left.
Monzo has seen customer card spend reduce at home and abroad, while new account signups have also slowed during the pandemic. In March, the senior management team at Monzo and board volunteered to take a 25% cut in salary and hundreds of employees have been furloughed.
Anil will also have an eight-hour time difference between the US and its main HQ in London. “This is one of the more left-field moves I’ve seen,” one bank executive told Sifted, also questioning Anil’s ability to oversee UK regulation.
At the last count, Blomfield had a 7% stake left in Monzo.