FinTech Companies Takeover as Disruptors of the Week
This has been a massive week for two different FinTech companies: MoneyLion & Mojo Mortgages. MoneyLion is nearing unicorn status with its mobile banking platform. Mojo just partnered with Monzo Bank to offer remortgaging through a banking app. With each company having stellar weeks, we’ve given them both the title of Disruptor of the Week.
MoneyLion is an online banking platform launched in 2013, and currently has over 5 million members. Most of the company’s member growth has happened in the past ten months; October had 3 million users, and this past April saw a base of 4 million users. They’ve added over a million members just this summer, seeing growth “at an annualized rate of greater than 1,000%.”
The company uses AI machine learning to create personalized recommendations that can be used to improve credit scores and overall financial health. It also relies on a subscription model of services to its user base.
This week, MoneyLion raised $100m in Series C funding, and raised $42m just 18 months ago, with a total of $227.5m raised since its launch six years ago. Their Series C capital was backed by banking sector powerhouses Capital One and Metabank. Metabank is the most significant player in the prepaid banking field, supporting NetSpend and Chime. It makes sense they’d be interested in a company that can help the under and unbanked populations.
With this new influx of cash, the company is thought to be at near Unicorn status, and its valuation will continue to grow with a plan to launch a stock trading platform in Q4.
Mojo is a UK FinTech firm that’s been sending shockwaves through the mortgage sector with the aim of streamlining brokerage fees. In the past 15 months, it’s seen 405% growth in applications. Launched in April 2018, it’s helped over 50,000 users save $4m in broker fees.
Its latest venture is teaming up with Monzo Bank on a pilot program that will allow 2,000 Monzo customers to view customized mortgage options. Mojo and Monzo are leading FinTech companies, and this partnership enables both to share data in their respective spaces. The app starts off asking 12 questions to ensure the correct options are shown and then ends with the ability to book a free advice call. The app uses customer data, such as age, location, and official banking details, to fuel its AI algorithm.
In an interview with DTC Daily, Mojo Mortgages Chief Product Officer Eddie Ross describes the integration benefits. “Because we can access their Monzo bank account details we can get the full fact find information by only having to ask 11 or 12 additional questions to then find suitable mortgage product.”
Mojo is also launching in tandem, a new in-house product called “Mortgage Score.” The app uses data from 20,000 users to provide an analysis of mortgage readiness, similar to a credit score.
CEO and co-founder Richard Hayes describes the product, as “a combination of their spending habits; how much they earn; their credit score from Experian; how much they’ve got saved up; and some personal insights into how much they’re thinking about buying a house for. We use all that data to give them insight into when they might be mortgage ready.”
In February, the company raised $7m. Hayes states that they’re “on a trajectory for a Series B investment and when you’re going through a scaling process, one of the important things is that continued growth.”
As the company continues to grow, their goal is to streamline the UK mortgage process between broker and consumer. Hayes notes that “Brokers are involved in 80 percent of all mortgage sales in the UK, but the market is really fragmented. Currently, around 42 percent don’t even have a website! We see it as an opportunity for disruption.”
It continues to be an excellent year for FinTech and their embracement of AI and Machine Learning. Q4 and into 2020 will foster more opportunities between financial companies to collaborate and share space. We’re excited to watch MoneyLion launch their trading platform in Q4, and to see Mojo Mortgage expand their pilot program with Monzo Bank.