Monzo, the UK challenger bank with over 2 million users, expands to the US

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Monzo, the U.K. challenger bank with more than two million customers and a unicorn valuation to go with it, has formally announced its U.S. expansion.

The tentative move — which TechCrunch exclusively reported was underway five months ago — will see a U.S. Monzo app and connected Mastercard debit card made available via in-person signups at events to be held soon. The roll-out will initially consists of a few thousand cards, supported by a waitlist in preparation for a wider launch.

In a call, Monzo co-founder and CEO Tom Blomfield told me he thinks the key to cracking North America is to create a fully localised version of Monzo based on carefully listening to U.S. users in order to find market-fit. There are obvious and less obvious cultural and technical differences in the way Brits and Americans save, spend and manage their finances and this will require significant product divergence.

In other words, Monzo isn’t presuming that specific features of the U.K. offering, which is currently seeing 200,000 people sign up each month, will automatically resonate with customers across the pond. To equally succeed in the U.S., it will be about the details and in a sense the company will need to act like a startup within what is now a scale-up if it is to repeat much of the Monzo playbook.

In the U.K., Monzo currently has an NPS score of 80, which Blomfield says is unusually high for a bank. He also tells me 60% of U.K. signups remain long-term active, transacting at once per week. However, as a counterpoint, the percentage of Monzo users that pay their salary into the Monzo account sits at between about 27% and 30% of active users, suggesting that a significant number of Monzo customers aren’t yet using it as their main account. Monzo’s definition of salaried is anyone who deposits at least £1,000 per month by bank transfer.

Returning back to America, Monzo says it will develop the U.S. version into a “fully-featured digital account” that can be accessed on your smartphone and will have the ability to extend into various “Monzo and third-party financial services”.

Initially, the challenger bank is partnering with an established U.S. bank, but is also working on applying for its own U.S. bank license. As in the U.K., the plan is to build and own as much of its technology stack as possible, which Blomfield says will be needed to give Monzo the agility to serve U.S. customers successfully.

To achieve this, Monzo will open an office in L.A., California, chosen “because it isn’t San Francisco,” says Blomfield. He says he was mindful of putting Monzo within the Silicon Valley bubble where rents are not only ridiculously high but product groupthink could be detrimental.

Meanwhile, Monzo joins a growing list of London-based B2C fintechs hoping to conquer America. Earlier today, money management app Emma announced that it had launched in the U.S. via a partnership with Plaid. Another example is banking chatbot and app Cleo, which quietly entered the U.S. nine months ago.

Added to this, Blomfield has always talked openly about his ambition to bring Monzo to the U.S. Over the years the challenger bank has attracted an array of U.S. investors. They include General Catalyst, Thrive Capital, Goodwater Capital, Stripe, Michael Moritz and Instagram co-founder Kevin Systrom. Most recently, TechCrunch reported that Y Combinator is also set to join the company’s cap table.