, Columnist
Unprofitable Fintechs at Risk of Laying an Egg
Neobanks like Varo and Monzo overlook history’s expensive lessons at their peril.
This was once a promising neobank.
Photographer: Bloomberg/BloombergThis article is for subscribers only.
This week marks the 22nd anniversary of a celebrated initial public offering: Egg, the internet bank funded by Prudential Plc, came to market at a valuation north of $2 billion. Less than a decade later, it was gone.
It’s easy to forget amid today’s fintech hype. But the stubbornly high customer acquisition costs coupled with marginally profitable operations that plagued Egg represent inescapable hurdles for the latest iteration of money-losing neobanks.