Reignited rivalry between Monzo and Starling divides UK tech

As book topics go, the founding of a bank would usually sound like a dull affair. But a new “tell all” memoir from the founder of Starling Bank — Anne Boden — has sent shockwaves through the tight-knit world of UK tech and venture capital.

An extract published in The Sunday Times revealed the first details of a falling out between Boden and Tom Blomfield, the creator of rival app-only bank Monzo. The account accused Blomfield of engineering an — ultimately failed — coup at Starling. Boden paints a picture of surprise and betrayal as her former protege-turned-rival goes behind her back to try and cut her out of her own business.

The story has divided London’s tech scene as to who’s in the right. But debate hasn’t just been about whether the account holds up. The tale has also sparked conversations about who gets to tell the story of a business’ founding — and whether stories like Boden’s should be told at all.

Yahoo Finance UK has reviewed a full copy of Boden’s book and spoken to people on both sides of the debate, including several who were involved in the early days of both companies.

Ultimately, whoever’s side you’re on, the facts remain that Blomfield left Starling along with several of the bank’s key staff members and set up a competing business.

The events of those few weeks in spring 2015 have clearly left a lasting mark on both sides and the reopening of those old wounds has had an impact well beyond the two banks.

‘Team Anne’ or ‘Team Tom’

For those close to the UK fintech scene, many of the basic details in question were already known.

Blomfield was hired as Starling’s first chief technology officer in mid-2014 but left along with the majority of Starling’s founding team in early 2015, as the Financial Times reported at the time. That group went on to launch Monzo — then called Mondo — just a few months later. The FT report cited “friction with chief executive Anne Boden” as the reason for the break.

Both founders have refrained from publicly going into detail about the seismic personnel changes that led to the near-death of Starling and birth of Monzo. Relations between the two founders — who bump into each other on the conference circuit — had been civil.

READ MORE: Starling CEO Anne Boden on Bounce Back loans and growing during COVID-19 pandemic

Boden’s decision to speak out now — five years after the event, in the midst of a pandemic — has electrified and divided the insular world of London tech. Steve O’Hear, a long-time London tech journalist who crops up in the book, said he was asked if he was “on Team Anne or team Tom.” The Telegraph claimed an unnamed tech CEO bought a copy of the Sunday Times just to burn the book extract.

Documents from the period reviewed by Yahoo Finance UK support the sequence of events laid out in Boden’s book: she and Blomfield engaged on a fundraising tour in late 2014 and were on the verge of signing a deal that ultimately fell through; Blomfield and Boden clashed, leading to discussions about the future of the business; and Blomfield came close to taking control of Starling before he and the team were left.

What is contentious is who was at fault and whether it can be called an attempted “coup.”

‘Hatchet job’

Those on “Team Tom” say the account is unfair on Monzo’s founder and underplays Boden’s role in the breakdown.

Baroness Denise Kingsmill, who was lined up to chair Starling but left to join Monzo, told the Telegraph Boden’s story was “one-sided.” Other sources — many of whom couldn't speak on the record due to confidentiality agreements — said Boden bore more responsibility for the events than she let on. They say it was less a coup and more a fundamental breakdown in relations.

READ MORE: Starling Bank seeks £35m in new competition funding: 'We're a safe pair of hands'

London venture capital fund Passion Capital held talks to invest in Starling during those early days, before ultimately investing in Monzo. On the day Boden’s first book extract was published in the Times, Passion’s founder Eileen Burbidge tweeted: “Asking for a friend: how much of a book has to be true for it to be categorised as non-fiction?”

As with all memoirs, the pages are generously peppered with anecdotes to give colour to the story. In the Sunday Times piece, Blomfield is described brooding over a girlfriend, torpedoing investment meetings, and failing to properly cater a Sunday roast.

One source close who witnessed those early days described the book as a “hatchet job” on the Monzo founder.

‘A fundamental clash’

While the breakup is still raw, it was unsurprising in hindsight. Boden readily admits in the book that her and Blomfield made something of an odd couple and hints at disagreements between them over how to run the business.

By the time she set up Starling, Boden had a 30-year banking career behind her. Early on in the project she racked up bills of £1m with PwC and KPMG — something that would have been common practice at a big corporate but made VCs uneasy.

Blomfield, a 30-something who came from a startup background, favoured a “bootstrap” approach — develop a cheap “minimal viable product” that could be refined along the way. (Mondo ultimately launched a pre-paid card to attract customers rather than wait to gain a full banking licence before launching, as Starling did.)

READ MORE: Challenger bank Starling raises another £40m

“There is a fundamental clash of strategy, mission, vision, and culture," said Jos Majic, the chief executive of Revuto, a London-based subscription management app that operates in the city's tight-nit fintech sector.

Boden and Blomfield’s odd couple nature is encapsulated by a detail in the book. On an investment trip to the US Boden stayed in hotels, while Blomfield opted for Airbnbs. Even when it came to accommodation, the pair went in different directions.

Their differences struck potential investors. Boden writes about her disappointment that “no one appeared able to get past that”.

Ultimately, their fundamentally different outlooks — combined with two strong personalities used to being in charge — seems to have been behind the breakdown in their working relationship.

‘Success is the best revenge’

Disagreements between founders or executives are not uncommon in business. What is unusual is to see them spill out into the open so publicly.

“It is not a good look for either of them, or either of their businesses,” said Martin Campbell, a former director of Virgin Money who now runs fintech communications consultancy Beacon Strategic.

Today, Starling and Monzo both have millions of customers. Each has attracted hundreds of millions of pounds in investment.

Baroness Denise Kingsmill, who was lined up as Starling’s first chair but left to join Monzo, told the Telegraph it was “in the best interests of everyone to resolve these [issues] quietly” and suggested Boden should have used “discretion”.

Since COVID-19 struck earlier this year, Starling has had the better crisis. The bank has swelled its small business lending book, hired extra people, and raised another £40m. Monzo has been forced to slash its valuation and lay-off staff. Blomfield stepped back from his public role as CEO earlier this year to take on the role of President.

“Success is the best revenge,” said one London tech insider. “You’d have thought she’d be happy.”

‘Who would take a risk on a woman in her fifties?’

Boden insists the book is less about score settling and more about sharing tips and advice for would-be entrepreneurs.

“This is a business book,” she told TechCrunch. “I was quite surprised that people started calling it a memoir.

“This is much more of a practical book about, you want to be an entrepreneur, you want to do a startup, you want to build something that’s never been done before.”

READ MORE: Monzo to lay off 120 staff

The full book is more forgiving of Blomfield than the Sunday Times extract makes out. Boden recalls telling the team during the thick of their disagreements that Blomfield was “one of the finest business people I have ever met.”

And while the “coup” arguably forms the climax of the book, it only takes up around 20 of the book’s 250 pages. Much of the tale focuses on Boden’s efforts to rebuild her business from the ashes.

Certainly Boden has an interesting story to tell — she is one of just a handful of women at the top of successful European tech startup. Once you factor in her age, she stands in a field of one.

Boden — 60 this year — speaks frankly about the challenges of starting a company, let alone a bank, in her position.

“If 99% of investments were going to men in their thirties, who would really want to take a risk on a woman in her fifties?” she writes.

Boden became “used to the look of utter confusion when each new recruit first arrived at the office seeing this fifty-year-old woman in charge of a banking startup.”

‘We don’t hear enough of women’s stories’

Liz Lumley, director of product strategy at VC Innovations and the organiser of the FINTech Talents festival, wrote a blog post describing her sympathy with Boden’s struggles after the Sunday Times extract was published.

“I don’t care if Anne Boden’s memoir is ‘her side of the story’ (whose side of the story should she be telling, exactly?) or how much of it is true or not true to make it ‘non-fiction’... women – so very often – get gaslighted out of telling their own story,” she wrote.

READ MORE: Monzo faces steep valuation drop as pandemic bites

“What’s difficult to describe is the actual barriers that get put in your way simply because you have a vagina,” Lumley told Yahoo Finance UK in a separate interview. “They are subtle and they put women in a position where you have to be perfect. You have to be beyond perfect.”

For Lumley, the efforts to silence Boden are precisely why she should speak out.

“We don’t hear enough of women’s stories. We’re told to shut up, we’re told to be good girls, we’re told if we speak up then we’re never going to get hired again. Lobbing a hand grenade? Sometimes you need that.”

Boden and Starling declined to speak to Yahoo Finance UK for this piece, as did Blomfield and Monzo. An ally said Blomfield hasn’t read the book and doesn’t intend to.

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Banking On It is published on Thursday 5 November.