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> While these challengers are successful in attracting large number of customers, many of them haven't quite yet made profit. Simultaneously, the larger the siz
by RcouF1uZ4gsC 7y ago
> While these challengers are successful in attracting large number of customers, many of them haven't quite yet made profit. Simultaneously, the larger the size, the more the losses.
I have seen this story okay out before. Startup basically grows base by losing money. Eventually they need to actually make a profit. Then come out all the dark patterns, selling of customer data, and other scummy behavior. If you are a customer of these banks be extra vigilant.
- Nextgrid 7y agoI am using Starling Bank. As far as I know they are profitable - they offer enterprise services (payment processing, etc) and use that to subsidise free consumer-facing services. What I don’t understand however is how the other challenger banks didn’t see this coming. Like how do you decide to build a bank and take millions of VC funding without a reasonable path to profitability? Also I think Monzo could’ve done well had they not taken VC money and spent it all - they do have a good product, they could’ve charged a token amount for it (1£/month?) and at scale it would’ve been decent revenue (they’re at 3 million customers now).
- wdb 7y agoGuess, they can spend the £100m of the special RBS fund in the UK: https://www.starlingbank.com/news/rbs-cif-funding-feb2019/ https://www.starlingbank.com/news/rbs-cif-funding-feb2019/