Monzo, the British digital bank, is close to a new funding round that will value it at around £4bn. This would be a sign that investors are confident in the company’s expansion.
People said that the UK fintech may finalise an agreement within the next two week to raise up to £350mn in a mix of existing and new investors. The company would be valued at approximately £3.6 billion before the investment, and £4 billion after the new capital is included.
CapitalG, the Alphabet investment fund, is expected to lead this round. Other investors include Tencent in China and Ribbit Capital from the US. HongShan, a Chinese venture capital firm that separated from Sequoia Capital in the last year, plans to participate with others as well, according to the sources.
The company raised funding previously in 2021 from investors including Tencent and the Abu Dhabi Growth Fund.
Monzo’s valuation increase would be a sign of an improved climate for start-ups in financial technology, after a period of turmoil amid rising interest rates. Investors have been turning away from fast-growing and cash-hungry businesses in recent years, with start-up venture capital funding falling last Year.
Monzo, a London-based company founded in 2015, is best known for its coral-pink debit cards. Since then it has expanded to new markets and products. It has a presence in the US, and offers a variety of services including ‘buy now and pay later’ and an investment platform.
Monzo announced recently that it has surpassed 9mn users after adding 2mn by 2023. It also boasts more than 380,000 customers in the business sector.
In May 2018, the company announced that its revenues had more than tripled, to £355.6mn in the year up to the end February 2023. This was due to higher interest rates and a tripling of its lending book to £759.7mn.
The bank, however, made a loss before tax of £116mn during the same period. This was partly due to the rapid growth in lending, which forced the bank to increase its provision for bad loans.
Monzo’s CEO TS Anil stated that the bank made an unspecified gain in March and was expecting to reach annual profitability by the end of the next financial year.
CapitalG is a fund that is solely supported by Alphabet and invests in startups at later stages of development. It has invested in companies like Stripe and Airbnb.
Monzo refused to comment. CapitalG, Tencent Ribbit, and HongShan representatives did not respond immediately to requests for comments.
In November, other media reported that Monzo and CapitalG were in discussions.
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.