Monzo eyes GPB 4 billion valuation with a new funding round

According to the Financial Times, sources familiar with the matter suggest that within the next weeks, Monzo could secure up to GBP 350 million from a combination of both new and existing investors. This would place the company's valuation at around GBP 3.6 billion before the infusion of fresh capital, and approximately GBP 4 billion thereafter. 

Leading the funding round is anticipated to be Alphabet's investment fund, CapitalG, with participation from notable investors such as China's Tencent and US fintech investor Ribbit Capital. Additionally, HongShan, the Chinese venture capital firm that parted ways with Sequoia Capital in the previous year, is expected to join the financing round alongside other investors. 

Monzo, recognised for its distinctive coral pink debit cards, was founded in 2015 and has since diversified its product offerings and expanded into new markets, including the US. Its services now include a Buy Now, Pay Later option and an investment platform. The company recently announced surpassing the milestone of 9 million customers, with over 380,000 business clients, having added 2 million customers in 2023 alone. 

Despite its growth, Monzo reported a pre-tax loss of GBP 116 million for the year ending February 2023, attributed in part to the need to increase provisions for potential bad loans due to its expanding lending activities. However, Monzo's CEO, TS Anil, expressed optimism, stating that the bank achieved profitability in March and is expected to achieve annual profitability in the upcoming financial year. 

CapitalG, an independent fund backed solely by Alphabet, focuses on investing in later-stage startups and has previously invested in prominent companies such as Stripe and Airbnb.

What else has Monzo been up to? 

In September 2023, Monzo launched an investment feature that allowed customers to invest in funds managed by BlackRock.The move came as an addition to Monzo’s existing interest-yielding savings accounts, being the first investing solution of the company. The application process is straightforward, with customers being invited to a waiting list to access the product. After being verified, eligible users are able to create an investment pot and learn about the product through a set of informational screens. 

At the time, Monzo was looking to enter new areas of financial services and, by launching this product, it enabled users to invest within an ecosystem that includes budgeting, spending, transferring money, and borrowing.