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Monzo to Lay Off 120 UK Staff; Varo Money Raises Series D Funding

Monzo

The FGB Digest brings you the latest news on the world’s fastest growing direct-to-consumer and challenger brands. In today’s edition: Monzo to lay off 120 UK staff; Varo Money raises Series D funding; and Sanrio launches direct-to-consumer site for popular characters. 

Monzo to lay off 120 UK staff

Monzo has announced internally that up to 120 UK staff are being made redundant. The news comes on the heels of the shuttering of its Las Vegas-based customer support office and almost 300 staff being furloughed in UK. 

The redundancies come despite Monzo previously stating that furloughs and pay cuts already carried out would mean further layoffs could be avoided. That no longer appears to be the case, with CEO TS Anil explaining that the current economic situation isn’t expected to revert back to normal quickly.

Anil told staff that in order to recognise their contribution, the bank will be waiving the one year “cliff” from their vesting schedule so that they won’t lose out on any shares due to them.

Like other banks and fintechs, the coronavirus crisis has resulted in Monzo seeing customer card spend reduce at home and (of course) abroad, meaning it is generating significantly less revenue from interchange fees. The bank has also postponed the launch of premium paid-for consumer accounts, one of only a handful of known planned revenue streams, alongside lending, of course.

Varo Money raises Series D funding

Mobile banking startup Varo Money has raised an additional USD$241m in Series D funding. The investment was co-led by new investor Gallatin Point Capital and existing investor The Rise Fund, and also included support from Bono. To date, Varo has raised USD$419.4m in funding. 

During the COVID-19 crisis, Varo served its customer base by providing early access to stimulus and unemployment relief funds, as it already does with users’ direct deposit paychecks. It also increased its deposit and ATM limits, and partnered with job platforms Steady and Wonolo to help connect its customers to new work opportunities.

Like most of its competitors, Varo itself is not a bank — its accounts to date have been provided by The Bancorp Bank, member FDIC. However, that may soon change.

In September 2018, Varo received preliminary approval from the Office of the Comptroller of the Currency (OCC). In February 2020, Varo announced it was the first banking startup to win approval for FDIC insurance. Last month, the company said it was moving to the final stage of its bank charter journey.

Sanrio launches direct-to-consumer site for popular characters

Sanrio are introducing their most popular characters including Hello Kitty, Gudetama and Aggretsuko, in a new way this week with the launch of their own direct-to-consumer e-commerce site

Shipping to Europe including the U.K., Australia and New Zealand, fans can now get their hands on a range of exclusive merchandise featuring nine of Sanrio’s most popular characters. The site features five exclusive collections – with characters reimagined on clothing, accessories and personalised products. Sanrio are also teaming up with an artist each month on a limited- edition art collection range. There will be one-off collaborations as well, the first of which will be with Instagram sensation Esther Bunny.

Alastair McHarrie, licensing director at Sanrio says that“at a time when most consumers are increasing their shopping online, we’re excited to show our new online destination and product offering to fans.” Sanrio have partnered with Star Editions who will be manufacturing the products and fulfilling orders, and the site design has been developed by Philosophy Digital.

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