Monzo has raised £340 million in a fresh round of funding which values the neobank at almost £4 billion.
The round, led by Alphabet’s investment fund CapitalG and Chinese venture capital investor HongShan, will see it take a second crack at the US market after it withdrew from a previous North American launch in 2021.
Tencent and Passion Capital also participated in the round.
It sees a remarkable turnaround continue at the London FinTech after it faced ‘material uncertainty’ over its future and an FCA investigation over potential failures in its anti-money laundering controls back in 2021.
Founded in 2015, Monzo now serves more than 9m customers and is the largest digital bank in the UK. It is the 7th largest UK bank by that measure.
It withdrew its application for a US banking licence in 2021 – months after a ‘soft launch’ in the country – after regulators informed it that the bid would be unlikely to succeed.
It hired Conor Walsh as US CEO late last year and this time plans to enter the US via a banking partnership which would allow it to bypass a licence application.
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Monzo turned a profit at the start of 2023 and expects to enter full-year profitability this year. It reported a pre-tax loss of £116m in 2023 as revenues climbed.
TS Anil, who took over as CEO from founder Tom Blomfield after he stepped down in 2020, said the business has “built incredible momentum over the past few years”.
He added: “With backing from global investors, we have the rocket fuel to go after our ambitions harder and faster, building Monzo into the one app that sits at the centre of our customers’ financial lives.
“Each milestone we’ve reached to this point has given us more strength and speed to make strides towards our mission – now we’ll scale to even greater heights and seize the huge opportunity ahead.”
The latest funding gives Monzo a higher valuation than its 2021 round. It is also eyeing entry into the Germany and France markets, according to Anil.
Gene Frantz, general partner at CapitalG, said: “We’re thrilled to lead this investment round in Monzo. In an industry long rife with stagnation and uninspired customer service, Monzo has emerged as the innovative, customer-centric bank consumers have long craved.”
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