WhoBuilt

How I Created Two Billion-Dollar Fintech Startups

Jan 30, 2024· 14 min· 253K views·Watch on YouTube

Speaker

Tom Blomfield, co-founder of GoCardless and Monzo and a Y Combinator partner, shares his startup journey and lessons with Y Combinator.

Early interests and first startup lessons

Blomfield began building websites for local businesses at 15, then studied law at Oxford while starting an online student marketplace. After graduating, he joined a YC batch with a bill-splitting idea, which the team pivoted into B2B payments and GoCardless. YC reset his expectations for the quality of ideas and execution required.

Leaving GoCardless to build Monzo

GoCardless grew slowly as the team added customers, but Blomfield left after three years because its problem did not feel personal enough to keep pursuing. He wanted to take on a larger challenge, and in 2015 he and his co-founders started Monzo to make banking software easier to use. They launched a prepaid-card prototype within three or four months, and word of mouth helped Monzo reach one million customers in about two and a half years.

Growth brought operational and personal strain

Blomfield says Monzo’s ambitious goal attracted talent, press attention and customers, while a simple user experience encouraged referrals. Rapid growth also brought financial crime investigations, threats, outages and intense scrutiny because customers depended on the bank for payments and paychecks. During COVID, card revenue fell by about half and a planned £100 million funding round was withdrawn shortly before closing.

Stepping away and recovering

Regulators urged Monzo to prepare to wind down while the company was losing £100 million a year. Blomfield described working long hours, struggling to function and finding that his identity had become intertwined with the company. He stepped back, and the new CEO, COO and executive team continued leading Monzo, which he says later grew to more than eight million UK customers and became profitable.

Returning to startup work through YC

After a year off, Blomfield began advising founders and made about 75 angel investments in nine months. He joined YC as a visiting partner and later became a group partner. He describes the role as a chance to give back by helping founders tackle difficult problems and build businesses.

Takeaways

  • Choose a problem you care about enough to work on for years.
  • Launch a usable early version and learn from customers quickly.
  • A bold, difficult goal can attract teammates and customers who want to help achieve it.
  • Plan for reliability and financial crime controls as customer reliance grows.
  • Treat founder capacity as a real constraint; stepping back can let a team carry the company forward.

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