Monday, 25 May 2020

Monzo Bosses Share Millions From Sales

Paul Rippon said that being named among Britain’s wealthiest people last weekend, with an estimated fortune of £120 million, would be “shock news” to his friends and family.

The former deputy chief executive of Monzo told The Sunday Times that most of the fortune was of the paper variety that “could just go tomorrow”.

However, The Times can reveal that the 49-year-old was savvy enough to ensure that he also had some cash on hand when he left the digital bank in January to run one of Europe’s largest alpaca farms with his wife, Debbie.

An analysis of Monzo filings reveals that Mr Rippon made £6.3 million from selling shares to investors. He was part of a group of founders, executives and staff who shared in £33.3 million by selling stock during funding rounds in 2017 and 2018 — about the same as the bank’s losses in 2018.

The proceeds also included £12.4 million for Gary Dolman, 57, Monzo’s former chief financial officer, who stepped down in March last year to join a venture capital firm, and £8.2 million for Jason Bates, who left to help to set up 11FS, a financial technology consultancy. Tom Blomfield, 34, Monzo’s outgoing chief executive, and co-founder Jonas Huckestein, who also still works at the bank, secured £2.6 million each.

Founded in 2015, Monzo is seeking to disrupt the retail banking industry. It has become known for its coral-coloured debit cards and app that allows customers to track their spending and to hold savings in different pots. It has more than four million customers but is under pressure to begin making money.

The beneficiaries of the share sales have come to light after Monzo’s re-filing of its 2019 confirmation statement, an official form that provides an annual snapshot of the ownership of a business. After a complaint from a member of the public to Companies House that Monzo had “breached the Companies Act” by failing to file properly, the corporate registry wrote to the bank in February asking for a compliant filing of the information. Monzo originally filed the statement on February 27 last year, but details of shareholders and share transfers were omitted. A second filing the following month still had missing details.

The 2019 statement was correctly refiled in March, shortly after the 2020 version. The bank indicated that a third-party supplier was responsible for the errors and that it was already tackling the issue.

Mr Blomfield revealed last week that he was stepping down to take up the new role of president. According to The Sunday Times Rich List, Monzo’s £2 billion valuation puts his remaining stake at about £140 million. However, the bank is reported to be in the midst of a “down round” fundraising in which its value could be cut to about £1.2 billion.

Monzo made a pre-tax loss of £50.7 million in the year to February 2019, up from £33.1 million in the previous 12 months. Mr Blomfield has waived his salary for this year while other executives took pay cuts to help to manage costs during the pandemic.

Monzo declined to comment.

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