Monzo ups marketing spend by 167% as it posts first profit

Monzo spent £58.5m on marketing last year, up from £21.7m the previous financial year, as part of its strategic expansion.  

Monzo revealed its first brand campaign in five years last month. Source: Monzo

Monzo more than doubled its marketing investment to £58.5m in the year to 31 March, a 167% increase on the £21.7m spent the previous year.

Overall operating expenses grew 51% as the brand “deliberately” invested to drive growth, explained group CEO TS Anil on the publication of the bank’s 2024 annual report today (3 June). The business “strategically expanded” its marketing investment to grow brand awareness and capture customer growth opportunities.

Describing the 2024 financial year as a “hugely successful year for attracting new customers”, Monzo saw customer numbers rise 31% on 2023 to 9.7 million. The plan now is to attract 2 million more customers over the year ahead.

“Most of this growth will be organic – customers joining us on a recommendation from a friend or family member – but we’ll continue investing in marketing to bring more people on our journey and promote the new products we’ve launched that will help them manage their financial lives,” said Anil.

Last month, Monzo released its first brand campaign in five years – and only its second ever – under new marketing boss AJ Coyne, who joined in January from fintech giant Klarna.  

“We’re at a point in time where we wanted to drive more scale and introduce the Monzo message nationwide,” Coyne told Marketing Week, calling it a “critical” investment as the bank gears up to launch in different international markets. 

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Anil described this as a “landmark” year for Monzo, with the digital bank reaching profitability for the first time since it was founded nine years ago: “Our brand is incredibly special, allowing us to connect uniquely with our customers.” 

Monzo made a profit before tax of £15.4m, a big leap from its £116.3m loss last year. The bank also closed a £489.5m raise, which it said will help it pursue growth opportunities.  

Revenue more than doubled to £880m, in part due to its net interest income – the difference between the income banks earn from lending and the interest paid to customers, which rose to £483m amid higher interest rates.

Monzo’s subscriptions business also made gains, with spend on plans including Monzo Business, Monzo Plus and Monzo Premium growing from £19.5m to £27.4m.

The bank’s brand health is in good shape, according to YouGov’s BrandIndex tracker. Monzo currently has an overall BrandIndex score – a measure of overall brand health – of 10, ahead of rivals Starling (7.7), Chase (7.2) and Revolut (3.9).  

For context, Nationwide has the highest brand health score (18.3), although Monzo is currently outpacing established rivals such as NatWest (9) and Barclays (9.1).

“I’ve never believed in the idea that a company has to choose between either being mission-oriented or focused on business outcomes,” said Anil. He claimed the year “proved Monzo is doing both”, adding that a strategy of putting the customer at the heart of everything is “working at scale.”  

Positive profit news for Monzo comes as so-called neobanks are facing an investment downturn. The sector gained $102bn (£80bn) in investment in 2021, which is now drying up, as reported by the Financial Times, with fewer investment deals being made.