London-based digital bank Monzo is currently in advanced negotiations to secure up to £350 million in a fresh funding round, potentially placing the company’s valuation at approximately £4 billion.
Sources familiar with the matter, as reported by the Financial Times, suggest that Monzo is close to reaching an agreement and could conclude the fundraising within the next fortnight.
The upcoming round is anticipated to be spearheaded by CapitalG, Alphabet’s growth equity investment arm, with involvement from existing Monzo supporters such as China’s Tencent and US fintech specialist Ribbit Capital, among others.
This injection of capital would further bolster Monzo’s financial standing following its previous fundraising effort in 2021, which valued the company at £3.5 billion.
The escalation in valuation reflects an amelioration in investor sentiment towards financial technology firms following a period of market instability.
Despite concerns stemming from escalating interest rates and stricter regulations, Monzo appears to have persuaded backers of its enduring potential.
Established in 2015, Monzo has transcended its iconic coral pink debit cards to diversify into realms like business banking, lending, investments, and buy-now-pay-later services.
Currently boasting over 9 million UK customers, including in excess of 380,000 business clientele, Monzo is also actively expanding into the US market.
In the preceding year, the digital bank experienced a twofold surge in revenues to £355.6 million and a threefold increase in its lending portfolio to £759.7 million.
Despite incurring a £116 million loss, the company disclosed its attainment of profitability in March 2023 and anticipates achieving full-year profitability imminently.
With fresh capital infusion and sustained expansion, 2024 holds promise as a pivotal year for Monzo, demonstrating its ability to transition from a burgeoning startup to a resilient digital bank capable of weathering economic turbulence.
The £4 billion valuation underscores investors’ faith in Monzo’s future trajectory.
Amidst the challenging financial landscape evident in recent quarters within the European and UK fintech sectors,
Monzo’s impending funding round stands out as a substantial endeavour, defying prevailing adverse trends in the industry.