9 ms·

Startup bank Mondo raised £1m crowdfunding in 96 seconds

83 points by obeattie 11y ago

shawabawa3 11y ago
This is a bit dishonest. They haven't raised £1m, they've had enough people sign up as "interested to invest" to reach £1m if everyone follows through. I signed up to invest £1000, but I haven't paid yet and have absolutely no obligation to, and as far as I know I also don't have to invest the full £1000, I just can't exceed that. edit: Their crowdcube page shows them having £600k so far
- xivzgrev 11y ago
  This is nuts I don't know of another crowd source that raised so much so fast. How did you hear about them to invest, and why did you?
  - shawabawa3 11y ago
    I heard about them on Hacker News I think. I invested mainly because I like the idea of a bank where I can do everything online. There's no reason I should still have to call or go in to a store to change my address/unblock my card (because of their crappy fraud detection) etc
    - birdman3131 11y ago
      Simple had the exact same idea years ago. I think they are still around and doing well although I have not looked at them in a while. (I think last time I looked you needed android or iOS and I am a windows phone user.)
      - Scottymeuk 11y ago
        Simple only went so far. They are just a nice interface on top of another bank. Mondo are becoming a full bank themselves.
        smcl 11y ago
        Hang on a sec - wasn't Simple's original vision to become a full bank and to start off as a nice interface? Because Mondo want to become a full bank, but have started off as a nice interface ...
        penfold27 11y ago
        Thats right.
      - izolate 11y ago
        I spoke to Tom (CEO of Mondo) at HN London about Simple. His take is that Simple failed, and that Mondo are following a different path. I'm not clued in enough to know the benefit of being a bank vs. building a UI over a willing banking partner's service.
    - onion2k 11y ago
      I really like the idea, but mainly as a driver for the other high street banks to do better. While I don't have the sort of money where I'd actually lose anything if Mondo failed (the government insures everything up to about £35k) I can only imagine how much hassle it'd be to try and move everything away from them if they did fail - especially if they failed in a way that meant they closed their mobile app API down without notice.
      - Scottymeuk 11y ago
        It's worth noting that Mondo are not insured yet, so any money in there now is not insured.
        shawabawa3 11y ago
        Until they get accredited all the funds are stored by Wirecard, their issuing bank, which is insured
    - forgetsusername 11y ago
      >I invested mainly because I like the idea of a bank where I can do everything online. Is this really unavailable in the US? Here in Canada, PC Financial has been operating like that for well over a decade. Sure, they have kiosks in some of their grocery stores for those people who want to talk to somebody (which is genius, really), but it's entirely virtual. I've operated almost exclusively online, outside of lost cards and things of that nature. Ordering cheques, creating new accounts, switching pins, transferring money, it's all a couple of clicks. >There's no reason I should still have to call or go in to a store to change my address/unblock my card So you'd prefer your bank didn't freeze the card based on what they deem to be suspicious activity? Good luck to those banks...
      - shawabawa3 11y ago
        > Is this really unavailable in the US? This is in the UK, and it might be available but certainly not with any of the major banks > So you'd prefer your bank didn't freeze the card based on what they deem to be suspicious activity? They'll still block cards on suspicious activity, but they allow you to manually unblock/block cards using the mobile app, and they can also use your phone location in their algorithms if you open the app while abroad
        beejiu 11y ago
        > This is in the UK, and it might be available but certainly not with any of the major banks I recently opened an account with HSBC fully online; didn't need to go into a branch. Think I have been to my Santander branch once over 4 years. I think the real advantage of 'online only' is not for consumer convenience but for lower operating costs on part of the bank. Smile and Egg were online only banks created in the late 90's, so the idea isn't new.
        phillc73 11y ago
        I guess we might disagree on the definition of major bank, but I've had an account with Smile[0], part of the Co-Operative Bank, for over 10 years. It's an Internet only bank, with no physical branches. I've always done everything online. What does Mondo offer that Smile doesn't? Also, as it is actually part of the Co-Operative bank, on the rare occasions where I've needed to withdraw a large lump sum of cash, I've been able to use those Co-Operative branches (that's happened about three times in 10 years). I also have a Number26 account,[1] which I only opened a few months ago. Again, I don't see the Mondo advantage. In the Mondo Beta phase customers must be London based and iPhone users. No such Number26 restrictions. I suppose I just don't understand the Mondo hype. They're good at marketing, but don't seem to offer much that isn't already available elsewhere. [0] http://www.smile.co.uk http://www.smile.co.uk [1] https://number26.eu/ https://number26.eu/
    - jhoechtl 11y ago
      How will a pure online bank be any better ... What guarantees that their fraud detection will be any better? Second, I dont know about your situation but for us Austrians getting my money from the ATM is free because traditional banks finance the ATM infrastructure. As there are now more and more online banks in the future I will have to pay once I want my money because online banks effectively utilize the infrastructure created by traditional banks.
      - d4nt 11y ago
        The transition was subtle, but these days [checking] banks are actually just Software/API companies. They provide an online account that supports the established electronic money transfer protocols in whatever country you happen to live. The fact that they have a network of retail stores in which you can talk to a salesperson about a loan is just a hangover from history. A bank without those elements would probably have much lower costs.
    - vidarh 11y ago
      Which bank is this? I have have cards with Barclays and MBNA in the UK, and neither makes you visit them to unblock cards. At least they've never made me do so.
    - jmedwards 11y ago
      If we assume that when Mondo raised from their investors a year ago - £2m for around 20-30% (assumed) of the company (http://techcrunch.com/2015/06/30/mondo-gets-passionate/ http://techcrunch.com/2015/06/30/mondo-gets-passionate/), how do you feel about the £1m valuation on 3.3% today?
    - tehwalrus 11y ago
      First direct?
  - charlieegan3 11y ago
    They've been talked about on HN more than once. Pretty sure that's how I heard of them. I invested to show support, I've had various current accounts and the usability has always been really poor. Time for something to shake the uk banks up a little, hopefully make them care about their customers a little more.
  - deleted 11y ago
    [deleted]
  - neximo4 11y ago
    I like there's absolute no fees when using the debit card abroad and you get the exchange rate 'at cost'. There's a building society that does this but it needs 5k or 500 a month in deposits I absolutely love that because I visit my family quite often and I'm usually ripped off with fees. I heard about them when they were applying for their license and just felt lots of people would find it appealing. While it is making less money they save a lot too.
    - coob 11y ago
      Halifax have a credit card that does exactly this.
      - neximo4 11y ago
        Never saw this card. Looks quite useful!
- nly 11y ago
  I fell outside the 1m 36s cutoff, despite my system clock still reading 13:01 when I got confirmation, probably only because I stopped to skim the T&C.
  - neximo4 11y ago
    I got stuck on their annoying typeform. I was on my mobile and agree wasn't clicking properly it kept going back. Then I was too late. So.. it could be worse!
- neximo4 11y ago
  What they did is essentially handle crowdcube's load. They couldn't take all of them at once so they made an app that could and sent the links to the first 1m pledged users gradually, so not as to crash their servers. But it is far from dishonest, when you pledge to crowdcube they don't take the money anyway, at least until after the round is over. Also a few people got in on Monday so they actually raised a bit more than 1m, the last few on crowdcube with the links valid links wont get through. In addition to those that don't get a chance to invest there's a whole line of people above the 1m..
anthonybsd 11y ago
Can someone explain to me an appeal of Mondo as opposed to some other established online banks (like Ally for example) ?
- shawabawa3 11y ago
  For starters, Mondo is based in the UK - Ally in the US I'm not sure if there are any other UK based online banks, I couldn't find any in 30seconds of googling
  - onion2k 11y ago
    One rival is https://www.atombank.co.uk/ https://www.atombank.co.uk/
    - nly 11y ago
      Also https://www.simple.com/ https://www.simple.com/ http://starlingbank.co.uk/ http://starlingbank.co.uk/ https://www.ffrees.co.uk/ https://www.ffrees.co.uk/ https://www.monese.com/ https://www.monese.com/ Not to mention a few of the big boys have "Internet only" brands: First Direct (HSBC), Smile (Co-operative Bank), etc. These typically have their own customer service and distance themselves from their parent operationally, while still leaning on that reputation. One thing that concerns me about investing in Mondo is that their only fruitful exit strategy might be being bought out. People are notoriously relunctant to switch current accounts, and a bad decade for public faith in banks might mean people will likely stick with names they know. They're also at least a year from launch afaict, and Android doesn't seem to be a priority. They could miss the boat.
      - shawabawa3 11y ago
        > and a bad decade for public faith in banks might mean people will likely stick with names they know Or, equally, make them switch to names they don't know and therefore don't distrust > People are notoriously relunctant to switch current (checking) accounts A big part of their pitch is being able to open an account on your phone in 30 seconds. We'll see if they're actually able to successfully market that though
krmmalik 11y ago
I should point out that Mondo isn't the only online only bank there's also FFREES and Monese that are already functional.
- neximo4 11y ago
  Monese isn't a bank and neither is FFREES (they say so on their website) > https://register.fca.org.uk/ShPo_firmdetailsPage?id=001b000000m4IXjAAM https://register.fca.org.uk/ShPo_firmdetailsPage?id=001b0000... Mondo will offer banking services (lending via OD)
lowpro 11y ago
I was ready to go at the time it opened (1 pm), and I actually read a bit of the disclaimer before I put in my information. At finished at 1:02, and was put on the waiting list. Needless to say I was a bit angry I was less than a minute away.
anc84 11y ago
Totally not a pre-organised marketing stunt.
- hawaiikaos 11y ago
  So? Good for them for jumping on the opportunity. Heaven forbid a startup try to make a name for itself...
deleted 11y ago
[deleted]
ultimatejman 11y ago
This news is important for banking in the UK for the following reasons: - UK banks are slow to innovate and people (especially younger generation) are getting annoyed. People want a bank that is digitally strong, Mondo's 30k waiting list proves this. - Banks will become more like platforms. Number26's partnership with TransferWise is an example of this beginning. See Clayton Christensen illustrate this https://youtu.be/oCKZwrfysbM?t=1h19m28s https://youtu.be/oCKZwrfysbM?t=1h19m28s - The UK is trying to make banking more competitive (last 5 years has had applications for more than 5 new banks, before this there was 1 new bank in 150 years). This policy is working. What remains to be seen is whether Mondo will make money in the way a traditional bank does. IMO the biggest challenge for a new banks is customer acquistion, and it looks like Mondo has a pretty good handle on this.
- neximo4 11y ago
  > UK banks are slow to innovate This is hardly true. The UK is one of the only countries which has a couple of simple features in banking no other country has: - Instant, Free transfers, including from one bank to another. Even on weekends & holidays. - APIs currently available (under the UK open banking government guidelines) - Pay to mobile phones (not that cool). - Debit via a Debit Card out of the Mastercard network (costs something like 6p per transaction or something, not sure of the details but there's no fixed fee) There are also a couple of other things like their fraud systems in how you can unblock your card without having to call customer sevice. Granted its an annoying robocall. Some customers also have authentication by voice from recordings via customer service calls. All this is in addition to what everyone else has we take for granted: Pinsentry, NFC, Chip and Pin. The list is quite long, but I hardly think the UK banks aren't innovators. By any measure they're doing a good job. Also check out Barclay's accelerator where they lend out their banking license to startups. > What remains to be seen is whether Mondo will make money in the way a traditional bank does. If their £1m in debit card spending is anything to go by they already have roughly £15k in the bank from Acq Bank revenue from Mastercard. This is just in alpha in 3 months with 200? users.
  - ultimatejman 11y ago
    > I hardly think the UK banks aren't innovators. I did not say they were not innovative at all. I said they were slow to innovate. This is being proven by the speed at which fintech startups are unbundling banking services into individual products. Zopa, Nutmeg, Transferwise could have been built by banks. But they were not. > Instant, Free transfers, including from one bank to another. Even on weekends & holidays. - Paypal in 1999? > APIs currently available (under the UK open banking government guidelines) Yodlee supplies APIs already. > they already have roughly £15k in the bank from Acq Bank revenue from Mastercard. Really? Mondo are currently paying for the prepaid cards, and more to load them through the app. This is probably around 2% ? So 20k cost for this? Maybe I am wrong, but I can't see how else the card gets loaded by a free payment. You are right, the barclays accelerator is great. And similar incubators and schemes are opening up. I still think it's pretty clear that innovation is coming from the outside.
rgovind 11y ago
So, I am always surprised by these apps. How do they (or Simple) go and convince Citibank or Bank of America to give them their data? What competitiive pressures would make BoA modernize their UI?
- cmdkeen 11y ago
  They're not - they're convincing Royal Bank of Scotland or Barclays customers to switch to their bank because it has a better UX. Mondo is in the process of registering as a bank.
- superuser2 11y ago
  They don't. Simple pays Bancorp Bank for the ability to use its APIs. Customer accounts are actually held at Bancorp, not Citi or BofA.
trumbitta2 11y ago
Also, the name on the sample card if you sign up is "Jimmy Fontana". This guy, famous for singing "Il Mondo": https://www.youtube.com/watch?v=0SGE8H4R9XA https://www.youtube.com/watch?v=0SGE8H4R9XA
polishninja 11y ago
Better software can only get you so far in banking. At the end of the day, they need to borrow and loan profitability and provide services at a low cost. In addition, they need customers, which are not easy to acquire for a new bank. Not having physical branches is definitely a cost saver; however, I’ve seen some surveys that indicate people still want access to some sort of physical branch. According to their previous Techcrunch article [0], they are writing their own full-stack banking software. Writing your own banking core, external facing software, and internal process software is a massive undertaking, especially dealing with all the regulation and certification processes with third parties. You then become not only a bank but a specialized software development shop as well. Something traditionally only the big banks can afford. I’m not sure, given they are a bank and software business, that their cost base is 1% or 2% of a traditional bank, as stated in their article [0]. I hope they build something awesome but I think to do something of this size will take more than a few million. Disclaimer: I write banking software. [0] http://techcrunch.com/2015/06/30/mondo-gets-passionate/ http://techcrunch.com/2015/06/30/mondo-gets-passionate/
- neximo4 11y ago
  One thing that's quite nice about what they're doing, and rather profitable is the OD system. With a credit card you have a seperate account, so when you get cash it doesn't have to pay off the card. With mondo it is a debit card with a current account which can overdraft and interest rates near a credit card (19.9% according to their papers) This means there's less risk for them and a smaller chance of NPLs as money needs to be paid off to the OD before the account is positive. While a normal bank can take this view in the aggregate term of a customer's account it encourages the user to engage in more risk taking where the customer can't pay it back. So you get less risk and the same interest rate. That being said they do save a lot on software building it in house contrary to hiring someone external to do it for them. If Oracle's standard margin are any indication there's a lot lost this way in terms of cost.
  - phillc73 11y ago
    > With mondo it is a debit card with a current account which can overdraft and interest rates near a credit card (19.9% according to their papers) What's the advantage here? With my Smile account I have a Visa debit card linked to my current account, with an agreed interest free overdraft for a certain amount and then an additional overdraft on which I pay interest. Why would I switch to Mondo?
throwaway34938 11y ago
This is a throwaway, I will be vouching for it from my main account however. It's a throwaway because finance crooks are extremely vindictive. So, this quote: >While we tried to make the process was fair as possible, I’d like to apologise for the frustrations over the last few days, and in particular to anyone who missed the chance to invest. strikes me as 100% scam verbiage. As in, if, right now, I wanted to perpetrate a scam, this is the exact verbiage I would use. "as well as contacting those who missed out". Crowdfunding rounds aren't "chances to invest" with a limited number of "slots" that you then "miss out on". They're priced securities - higher demand would just mean the security was mispriced and it needed to be priced higher. There could be a reason for this to be done, but none was offered. The non-scammy version of this would be something like "We wanted to make a number of slots available at the valuation we selected for the current investment round of £6m. We did not want to immediately raise the valuation to people who showed interest, because we believe that startups can be hindered by too large of a valuation too soon. All that said, there is more interest at the current price than the number of shares we had to give out. We will consider whether we need to raise additional investment to execute on our roadmap just now, if we do then at what valuation, and we may contact some of the people who were not included now." This would be sane. The text I'm looking at is transparent fraud text. It's literally the type of text I would be writing if I were doing my best to commit a fraud, right now. Notice all of the emphasis on future funding rounds this year - and zero talk whatsoever about executing on the vision, i.e. using the funds. "We’d love to include a crowdfunding component in our next round of funding later this year, so you should hopefully have a chance to invest in future." I cannot think of anyone with anything but pure, unadulterated, fraudulent intentions making this kind of a press release. Show me a single press release written in this style, without any mention whatsoever of using the funds in any way. Oh, they seem to be executing all right: executing on raising money.
- throwaway34938 11y ago
  Since this is Hacker News let me give the most charitable reading I can to the impression I have. Most charitably, they forgot to talk more about their roadmap because they slightly fell in love with the idea of raising money. PG talks about this explicitly: http://paulgraham.com/fr.html http://paulgraham.com/fr.html " Don't get addicted to fundraising. Fundraising is a chore for most founders, but some find it more interesting than working on their startup. The work at an early stage startup often consists of unglamorous schleps. Whereas fundraising, when it's going well, can be quite the opposite. Instead of sitting in your grubby apartment listening to users complain about bugs in your software, you're being offered millions of dollars by famous investors over lunch at a nice restaurant. [26] The danger of fundraising is particularly acute for people who are good at it. It's always fun to work on something you're good at. If you're one of these people, beware. Fundraising is not what will make your company successful. Listening to users complain about bugs in your software is what will make you successful. And the big danger of getting addicted to fundraising is not merely that you'll spend too long on it or raise too much money. It's that you'll start to think of yourself as being already successful, and lose your taste for the schleps you need to undertake to actually be successful. Startups can be destroyed by this. When I see a startup with young founders that is fabulously successful at fundraising, I mentally decrease my estimate of the probability that they'll succeed. The press may be writing about them as if they'd been anointed as the next Google, but I'm thinking "this is going to end badly." " So if this is the case, I urge this startup to talk more about its roadmap and execution, rather than (only) how much money they raised in 96 seconds. Which itself is a good achievement that we should rightfully praise. EDIT: I've tried to delete the parent post.
dmoy 11y ago
I know precious little about the UK banking system. Is there an equivent to the US's FDIC or Canada's CDIC?
- akhatri_aus 11y ago
  If you mean deposit safety there is the FSCS which protects account up to £75k (~$100k)

83 points by obeattie 11y ago

This is a bit dishonest. They haven't raised £1m, they've had enough people sign up as "interested to invest" to reach £1m if everyone follows through. I signed up to invest £1000, but I haven't paid yet and have absolutely no obligation to, and as far as I know I also don't have to invest the full £1000, I just can't exceed that. edit: Their crowdcube page shows them having £600k so far

xivzgrev 11y ago
This is nuts I don't know of another crowd source that raised so much so fast. How did you hear about them to invest, and why did you?
- shawabawa3 11y ago
  I heard about them on Hacker News I think. I invested mainly because I like the idea of a bank where I can do everything online. There's no reason I should still have to call or go in to a store to change my address/unblock my card (because of their crappy fraud detection) etc
  - birdman3131 11y ago
    Simple had the exact same idea years ago. I think they are still around and doing well although I have not looked at them in a while. (I think last time I looked you needed android or iOS and I am a windows phone user.)
    - Scottymeuk 11y ago
      Simple only went so far. They are just a nice interface on top of another bank. Mondo are becoming a full bank themselves.
      - smcl 11y ago
        Hang on a sec - wasn't Simple's original vision to become a full bank and to start off as a nice interface? Because Mondo want to become a full bank, but have started off as a nice interface ...
        penfold27 11y ago
        Thats right.
    - izolate 11y ago
      I spoke to Tom (CEO of Mondo) at HN London about Simple. His take is that Simple failed, and that Mondo are following a different path. I'm not clued in enough to know the benefit of being a bank vs. building a UI over a willing banking partner's service.
  - onion2k 11y ago
    I really like the idea, but mainly as a driver for the other high street banks to do better. While I don't have the sort of money where I'd actually lose anything if Mondo failed (the government insures everything up to about £35k) I can only imagine how much hassle it'd be to try and move everything away from them if they did fail - especially if they failed in a way that meant they closed their mobile app API down without notice.
    - Scottymeuk 11y ago
      It's worth noting that Mondo are not insured yet, so any money in there now is not insured.
      - shawabawa3 11y ago
        Until they get accredited all the funds are stored by Wirecard, their issuing bank, which is insured
  - forgetsusername 11y ago
    >I invested mainly because I like the idea of a bank where I can do everything online. Is this really unavailable in the US? Here in Canada, PC Financial has been operating like that for well over a decade. Sure, they have kiosks in some of their grocery stores for those people who want to talk to somebody (which is genius, really), but it's entirely virtual. I've operated almost exclusively online, outside of lost cards and things of that nature. Ordering cheques, creating new accounts, switching pins, transferring money, it's all a couple of clicks. >There's no reason I should still have to call or go in to a store to change my address/unblock my card So you'd prefer your bank didn't freeze the card based on what they deem to be suspicious activity? Good luck to those banks...
    - shawabawa3 11y ago
      > Is this really unavailable in the US? This is in the UK, and it might be available but certainly not with any of the major banks > So you'd prefer your bank didn't freeze the card based on what they deem to be suspicious activity? They'll still block cards on suspicious activity, but they allow you to manually unblock/block cards using the mobile app, and they can also use your phone location in their algorithms if you open the app while abroad
      - beejiu 11y ago
        > This is in the UK, and it might be available but certainly not with any of the major banks I recently opened an account with HSBC fully online; didn't need to go into a branch. Think I have been to my Santander branch once over 4 years. I think the real advantage of 'online only' is not for consumer convenience but for lower operating costs on part of the bank. Smile and Egg were online only banks created in the late 90's, so the idea isn't new.
      - phillc73 11y ago
        I guess we might disagree on the definition of major bank, but I've had an account with Smile[0], part of the Co-Operative Bank, for over 10 years. It's an Internet only bank, with no physical branches. I've always done everything online. What does Mondo offer that Smile doesn't? Also, as it is actually part of the Co-Operative bank, on the rare occasions where I've needed to withdraw a large lump sum of cash, I've been able to use those Co-Operative branches (that's happened about three times in 10 years). I also have a Number26 account,[1] which I only opened a few months ago. Again, I don't see the Mondo advantage. In the Mondo Beta phase customers must be London based and iPhone users. No such Number26 restrictions. I suppose I just don't understand the Mondo hype. They're good at marketing, but don't seem to offer much that isn't already available elsewhere. [0] http://www.smile.co.uk http://www.smile.co.uk [1] https://number26.eu/ https://number26.eu/
  - jhoechtl 11y ago
    How will a pure online bank be any better ... What guarantees that their fraud detection will be any better? Second, I dont know about your situation but for us Austrians getting my money from the ATM is free because traditional banks finance the ATM infrastructure. As there are now more and more online banks in the future I will have to pay once I want my money because online banks effectively utilize the infrastructure created by traditional banks.
    - d4nt 11y ago
      The transition was subtle, but these days [checking] banks are actually just Software/API companies. They provide an online account that supports the established electronic money transfer protocols in whatever country you happen to live. The fact that they have a network of retail stores in which you can talk to a salesperson about a loan is just a hangover from history. A bank without those elements would probably have much lower costs.
  - vidarh 11y ago
    Which bank is this? I have have cards with Barclays and MBNA in the UK, and neither makes you visit them to unblock cards. At least they've never made me do so.
  - jmedwards 11y ago
    If we assume that when Mondo raised from their investors a year ago - £2m for around 20-30% (assumed) of the company (http://techcrunch.com/2015/06/30/mondo-gets-passionate/ http://techcrunch.com/2015/06/30/mondo-gets-passionate/), how do you feel about the £1m valuation on 3.3% today?
  - tehwalrus 11y ago
    First direct?
- charlieegan3 11y ago
  They've been talked about on HN more than once. Pretty sure that's how I heard of them. I invested to show support, I've had various current accounts and the usability has always been really poor. Time for something to shake the uk banks up a little, hopefully make them care about their customers a little more.
- deleted 11y ago
  [deleted]
- neximo4 11y ago
  I like there's absolute no fees when using the debit card abroad and you get the exchange rate 'at cost'. There's a building society that does this but it needs 5k or 500 a month in deposits I absolutely love that because I visit my family quite often and I'm usually ripped off with fees. I heard about them when they were applying for their license and just felt lots of people would find it appealing. While it is making less money they save a lot too.
  - coob 11y ago
    Halifax have a credit card that does exactly this.
    - neximo4 11y ago
      Never saw this card. Looks quite useful!
nly 11y ago
I fell outside the 1m 36s cutoff, despite my system clock still reading 13:01 when I got confirmation, probably only because I stopped to skim the T&C.
- neximo4 11y ago
  I got stuck on their annoying typeform. I was on my mobile and agree wasn't clicking properly it kept going back. Then I was too late. So.. it could be worse!
neximo4 11y ago
What they did is essentially handle crowdcube's load. They couldn't take all of them at once so they made an app that could and sent the links to the first 1m pledged users gradually, so not as to crash their servers. But it is far from dishonest, when you pledge to crowdcube they don't take the money anyway, at least until after the round is over. Also a few people got in on Monday so they actually raised a bit more than 1m, the last few on crowdcube with the links valid links wont get through. In addition to those that don't get a chance to invest there's a whole line of people above the 1m..

anthonybsd 11y ago

Can someone explain to me an appeal of Mondo as opposed to some other established online banks (like Ally for example) ?

shawabawa3 11y ago
For starters, Mondo is based in the UK - Ally in the US I'm not sure if there are any other UK based online banks, I couldn't find any in 30seconds of googling
- onion2k 11y ago
  One rival is https://www.atombank.co.uk/ https://www.atombank.co.uk/
  - nly 11y ago
    Also https://www.simple.com/ https://www.simple.com/ http://starlingbank.co.uk/ http://starlingbank.co.uk/ https://www.ffrees.co.uk/ https://www.ffrees.co.uk/ https://www.monese.com/ https://www.monese.com/ Not to mention a few of the big boys have "Internet only" brands: First Direct (HSBC), Smile (Co-operative Bank), etc. These typically have their own customer service and distance themselves from their parent operationally, while still leaning on that reputation. One thing that concerns me about investing in Mondo is that their only fruitful exit strategy might be being bought out. People are notoriously relunctant to switch current accounts, and a bad decade for public faith in banks might mean people will likely stick with names they know. They're also at least a year from launch afaict, and Android doesn't seem to be a priority. They could miss the boat.
    - shawabawa3 11y ago
      > and a bad decade for public faith in banks might mean people will likely stick with names they know Or, equally, make them switch to names they don't know and therefore don't distrust > People are notoriously relunctant to switch current (checking) accounts A big part of their pitch is being able to open an account on your phone in 30 seconds. We'll see if they're actually able to successfully market that though

krmmalik 11y ago

I should point out that Mondo isn't the only online only bank there's also FFREES and Monese that are already functional.

neximo4 11y ago
Monese isn't a bank and neither is FFREES (they say so on their website) > https://register.fca.org.uk/ShPo_firmdetailsPage?id=001b000000m4IXjAAM https://register.fca.org.uk/ShPo_firmdetailsPage?id=001b0000... Mondo will offer banking services (lending via OD)

lowpro 11y ago

I was ready to go at the time it opened (1 pm), and I actually read a bit of the disclaimer before I put in my information. At finished at 1:02, and was put on the waiting list. Needless to say I was a bit angry I was less than a minute away.

anc84 11y ago

Totally not a pre-organised marketing stunt.

hawaiikaos 11y ago
So? Good for them for jumping on the opportunity. Heaven forbid a startup try to make a name for itself...

deleted 11y ago

[deleted]

ultimatejman 11y ago

This news is important for banking in the UK for the following reasons: - UK banks are slow to innovate and people (especially younger generation) are getting annoyed. People want a bank that is digitally strong, Mondo's 30k waiting list proves this. - Banks will become more like platforms. Number26's partnership with TransferWise is an example of this beginning. See Clayton Christensen illustrate this https://youtu.be/oCKZwrfysbM?t=1h19m28s https://youtu.be/oCKZwrfysbM?t=1h19m28s - The UK is trying to make banking more competitive (last 5 years has had applications for more than 5 new banks, before this there was 1 new bank in 150 years). This policy is working. What remains to be seen is whether Mondo will make money in the way a traditional bank does. IMO the biggest challenge for a new banks is customer acquistion, and it looks like Mondo has a pretty good handle on this.

neximo4 11y ago
> UK banks are slow to innovate This is hardly true. The UK is one of the only countries which has a couple of simple features in banking no other country has: - Instant, Free transfers, including from one bank to another. Even on weekends & holidays. - APIs currently available (under the UK open banking government guidelines) - Pay to mobile phones (not that cool). - Debit via a Debit Card out of the Mastercard network (costs something like 6p per transaction or something, not sure of the details but there's no fixed fee) There are also a couple of other things like their fraud systems in how you can unblock your card without having to call customer sevice. Granted its an annoying robocall. Some customers also have authentication by voice from recordings via customer service calls. All this is in addition to what everyone else has we take for granted: Pinsentry, NFC, Chip and Pin. The list is quite long, but I hardly think the UK banks aren't innovators. By any measure they're doing a good job. Also check out Barclay's accelerator where they lend out their banking license to startups. > What remains to be seen is whether Mondo will make money in the way a traditional bank does. If their £1m in debit card spending is anything to go by they already have roughly £15k in the bank from Acq Bank revenue from Mastercard. This is just in alpha in 3 months with 200? users.
- ultimatejman 11y ago
  > I hardly think the UK banks aren't innovators. I did not say they were not innovative at all. I said they were slow to innovate. This is being proven by the speed at which fintech startups are unbundling banking services into individual products. Zopa, Nutmeg, Transferwise could have been built by banks. But they were not. > Instant, Free transfers, including from one bank to another. Even on weekends & holidays. - Paypal in 1999? > APIs currently available (under the UK open banking government guidelines) Yodlee supplies APIs already. > they already have roughly £15k in the bank from Acq Bank revenue from Mastercard. Really? Mondo are currently paying for the prepaid cards, and more to load them through the app. This is probably around 2% ? So 20k cost for this? Maybe I am wrong, but I can't see how else the card gets loaded by a free payment. You are right, the barclays accelerator is great. And similar incubators and schemes are opening up. I still think it's pretty clear that innovation is coming from the outside.

rgovind 11y ago

So, I am always surprised by these apps. How do they (or Simple) go and convince Citibank or Bank of America to give them their data? What competitiive pressures would make BoA modernize their UI?

cmdkeen 11y ago
They're not - they're convincing Royal Bank of Scotland or Barclays customers to switch to their bank because it has a better UX. Mondo is in the process of registering as a bank.
superuser2 11y ago
They don't. Simple pays Bancorp Bank for the ability to use its APIs. Customer accounts are actually held at Bancorp, not Citi or BofA.

trumbitta2 11y ago

Also, the name on the sample card if you sign up is "Jimmy Fontana". This guy, famous for singing "Il Mondo": https://www.youtube.com/watch?v=0SGE8H4R9XA https://www.youtube.com/watch?v=0SGE8H4R9XA

polishninja 11y ago

Better software can only get you so far in banking. At the end of the day, they need to borrow and loan profitability and provide services at a low cost. In addition, they need customers, which are not easy to acquire for a new bank. Not having physical branches is definitely a cost saver; however, I’ve seen some surveys that indicate people still want access to some sort of physical branch. According to their previous Techcrunch article [0], they are writing their own full-stack banking software. Writing your own banking core, external facing software, and internal process software is a massive undertaking, especially dealing with all the regulation and certification processes with third parties. You then become not only a bank but a specialized software development shop as well. Something traditionally only the big banks can afford. I’m not sure, given they are a bank and software business, that their cost base is 1% or 2% of a traditional bank, as stated in their article [0]. I hope they build something awesome but I think to do something of this size will take more than a few million. Disclaimer: I write banking software. [0] http://techcrunch.com/2015/06/30/mondo-gets-passionate/ http://techcrunch.com/2015/06/30/mondo-gets-passionate/

neximo4 11y ago
One thing that's quite nice about what they're doing, and rather profitable is the OD system. With a credit card you have a seperate account, so when you get cash it doesn't have to pay off the card. With mondo it is a debit card with a current account which can overdraft and interest rates near a credit card (19.9% according to their papers) This means there's less risk for them and a smaller chance of NPLs as money needs to be paid off to the OD before the account is positive. While a normal bank can take this view in the aggregate term of a customer's account it encourages the user to engage in more risk taking where the customer can't pay it back. So you get less risk and the same interest rate. That being said they do save a lot on software building it in house contrary to hiring someone external to do it for them. If Oracle's standard margin are any indication there's a lot lost this way in terms of cost.
- phillc73 11y ago
  > With mondo it is a debit card with a current account which can overdraft and interest rates near a credit card (19.9% according to their papers) What's the advantage here? With my Smile account I have a Visa debit card linked to my current account, with an agreed interest free overdraft for a certain amount and then an additional overdraft on which I pay interest. Why would I switch to Mondo?

throwaway34938 11y ago

This is a throwaway, I will be vouching for it from my main account however. It's a throwaway because finance crooks are extremely vindictive. So, this quote: >While we tried to make the process was fair as possible, I’d like to apologise for the frustrations over the last few days, and in particular to anyone who missed the chance to invest. strikes me as 100% scam verbiage. As in, if, right now, I wanted to perpetrate a scam, this is the exact verbiage I would use. "as well as contacting those who missed out". Crowdfunding rounds aren't "chances to invest" with a limited number of "slots" that you then "miss out on". They're priced securities - higher demand would just mean the security was mispriced and it needed to be priced higher. There could be a reason for this to be done, but none was offered. The non-scammy version of this would be something like "We wanted to make a number of slots available at the valuation we selected for the current investment round of £6m. We did not want to immediately raise the valuation to people who showed interest, because we believe that startups can be hindered by too large of a valuation too soon. All that said, there is more interest at the current price than the number of shares we had to give out. We will consider whether we need to raise additional investment to execute on our roadmap just now, if we do then at what valuation, and we may contact some of the people who were not included now." This would be sane. The text I'm looking at is transparent fraud text. It's literally the type of text I would be writing if I were doing my best to commit a fraud, right now. Notice all of the emphasis on future funding rounds this year - and zero talk whatsoever about executing on the vision, i.e. using the funds. "We’d love to include a crowdfunding component in our next round of funding later this year, so you should hopefully have a chance to invest in future." I cannot think of anyone with anything but pure, unadulterated, fraudulent intentions making this kind of a press release. Show me a single press release written in this style, without any mention whatsoever of using the funds in any way. Oh, they seem to be executing all right: executing on raising money.

throwaway34938 11y ago
Since this is Hacker News let me give the most charitable reading I can to the impression I have. Most charitably, they forgot to talk more about their roadmap because they slightly fell in love with the idea of raising money. PG talks about this explicitly: http://paulgraham.com/fr.html http://paulgraham.com/fr.html " Don't get addicted to fundraising. Fundraising is a chore for most founders, but some find it more interesting than working on their startup. The work at an early stage startup often consists of unglamorous schleps. Whereas fundraising, when it's going well, can be quite the opposite. Instead of sitting in your grubby apartment listening to users complain about bugs in your software, you're being offered millions of dollars by famous investors over lunch at a nice restaurant. [26] The danger of fundraising is particularly acute for people who are good at it. It's always fun to work on something you're good at. If you're one of these people, beware. Fundraising is not what will make your company successful. Listening to users complain about bugs in your software is what will make you successful. And the big danger of getting addicted to fundraising is not merely that you'll spend too long on it or raise too much money. It's that you'll start to think of yourself as being already successful, and lose your taste for the schleps you need to undertake to actually be successful. Startups can be destroyed by this. When I see a startup with young founders that is fabulously successful at fundraising, I mentally decrease my estimate of the probability that they'll succeed. The press may be writing about them as if they'd been anointed as the next Google, but I'm thinking "this is going to end badly." " So if this is the case, I urge this startup to talk more about its roadmap and execution, rather than (only) how much money they raised in 96 seconds. Which itself is a good achievement that we should rightfully praise. EDIT: I've tried to delete the parent post.

dmoy 11y ago

I know precious little about the UK banking system. Is there an equivent to the US's FDIC or Canada's CDIC?

akhatri_aus 11y ago
If you mean deposit safety there is the FSCS which protects account up to £75k (~$100k)