Monzo, a digital bank popular with millennials, is set to become one of the UK’s technology “unicorns” after lining up new finance that would value the three-year-old company at more than $1bn (£787m).
The London-based bank has organised $150m of funding from investors, including Silicon Valley’s Accel Partners, which was an early investor in Wonga. Monzo’s fundraising will value it at up to $1.5bn – about four times the £280m value placed on the bank when it last raised money in November 2017, the Financial Times reported.
Monzo is a smartphone-only “challenger” to the big high street banks and has almost 900,000 customers. In its first round of crowdfunding in 2016 it raised £1m in 96 seconds.
More recently the singer Tom Odell and the Instagram co-founder Kevin Systrom became investors.
The bank launched with a shocking-pink prepaid debit card and has started offering current accounts after gaining a banking licence last year.
Monzo’s initial appeal was fee-free foreign currency transactions but the founder and chief executive, Tom Blomfield, told the Guardian last year the bank’s main selling point was letting people organise their money on a smartphone.
“It gives you real-time visibility and control. It’s one of those home-screen apps: you have five or six apps you use to live your life and Monzo is one of those things,” Blomfield said. At the time, half of Monzo’s customers were under 30 and a further quarter were under 40.
The $1.5bn valuation would put Monzo alongside other so-called unicorn UK technology companies such as Deliveroo and Skyscanner valued at $1bn or more.
Monzo, like Atom Bank and Starling, is one of a growing number of financial technology companies offering digital services to lure smartphone users from traditional banks.
It will use the extra money to add new products, including short-term unsecured loans and high-interest savings accounts via another bank, the FT said.
A Monzo spokeswoman declined to comment on the company’s valuation or funding round, which is due to be announced by the end of 2018.
Monzo is closing in on 1 million. To put that into context, TSB still has 2 million customers.
