According to Sky News, Monzo, which has secured a valuation exceeding USD 5 billion, is in advanced talks to raise approximately USD 50 million by issuing new shares to Singapore's Government Investment Corporation (GIC). The additional funding, if finalised, could be announced in the coming weeks.
The potential investment from GIC would broaden the spectrum of shareholders for Monzo, which was founded in 2015 and amassed over nine million customers and diversified its offerings to include investments and instant access savings accounts.
In its recent funding round, Monzo confirmed raising over GBP 300m by selling shares to a syndicate of investors led by Capital G, the growth fund of Alphabet, Google's parent company. The involvement of Capital G reportedly played a role in attracting interest from GIC, which is among the world's largest state-backed investment funds.
Sky News further reports that Monzo ranks as the seventh-largest bank in the UK by customer base. It belongs to a new wave of banks that have gained a significant share of the UK retail banking market since the financial crisis. Competitors in this space include Starling Bank, and Revolut, valued at USD 33 billion in a 2021 funding round.
Monzo has recovered from a challenging period two years ago when it faced scrutiny from the City watchdog for potential breaches of anti-money laundering and financial crime rules. The company is expected to achieve profitability this year, which is a significant step forward for a standalone digital bank.
The latest fundraising round is anticipated to be Monzo's final one before its planned initial public offering (IPO), which would involve offering shares to the public. As part of its international expansion strategy preceding the IPO, Monzo recently restructured its corporate setup to establish Monzo Bank Holding Group, aiming to avoid regulatory issues in new overseas markets. Among Monzo's existing investors are Tencent, Passion Capital, Accel, and General Catalyst.
In March 2024, Monzo raised USD 431.26 million at a USD 5.07 billion valuation to expand and introduce new products. The digital bank’s funding round was led by CapitalG and included an investment from GV (Google Ventures) and Chinese venture capital firm HongShan Capital.
Monzo revealed that a significant part of the new funds will be allocated toward helping the company relaunch its services in the US. The neobank previously tried launching in the country in 2019, with a beta product available for American consumers.
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