The London-based
digital bank Monzo is in advanced talks to raise up to £350 million in a new
funding round that could value the company at around £4 billion. According to
sources familiar with the matter cited by Financial Times, Monzo is nearing a
deal and could finalize the fundraising in the next two weeks.
The new
round is expected to be led by CapitalG, Alphabet’s growth equity investment
fund, with participation from existing Monzo backers like China’s Tencent and the US
fintech specialist Ribbit Capital, among others. This new infusion of capital would further build on Monzo’s
last fundraising in 2021, which valued the company at £3.5 billion.
A step up
in valuation reflects improving investor sentiment towards financial technology
companies after a period of market turbulence. In recent years, rising interest
rates and tighter regulations have made investors wary of fast-scaling,
cash-burning startups. But, Monzo seems to have convinced backers of its
long-term potential.
🚨 𝗡𝗲𝘄𝘀 𝗙𝗹𝗮𝘀𝗵: @monzo is nearing a new round of funding that would value the British digital bank at about £4bn, according to people familiar with the matter.
The UK fintech could finalise a deal as soon as the next two weeks to raise as much as £350mn from a mix of… pic.twitter.com/wHIx6PsaSz
— Marcel van Oost (@oost_marcel) February 20, 2024
Since its
founding in 2015, Monzo has expanded well beyond its iconic coral pink debit
cards into areas like business banking, lending, investments and
buy-now-pay-later. It now counts over 9 million UK customers, including over
380,000 business clients. An international push is also underway, with Monzo
active in the US market.
Last year,
the digital bank doubled its revenues to £355.6 million and tripled its lending book to £759.7
million. Though it still posted a £116 million loss, the company said it turned
a profit in March 2023 and is on track to achieve full-year profitability soon.
With fresh
funds and continued growth, 2024 could be a landmark year for Monzo to
demonstrate it can transition from a buzzy startup into a sustainable digital
bank able to withstand economic turbulence. The £4 billion valuation affirms
investors’ confidence in Monzo’s future prospects.
Fintech and VC Funding
Plummet off a Cliff
As observed
in the financial landscapes of fintech funding in Europe and the UK in recent
quarters, the funding round Monzo aims to finalize stands out as one of the
larger endeavors, defying the adverse trends seen in the industry.
The latest KPMG
Pulse of Fintech report underscores the challenges within the fintech
sector, noting a significant downturn in investment across the globe in 2023.
Fintech investment plummeted to $113.7 billion from the previous year’s $196.3
billion, with the number of deals dropping to the lowest since 2017, totaling
4,547.
Despite the
overall decline, a marginal recovery was observed from the first to the second
half of 2023, with investments slightly increasing from $55.5 billion to $58.2
billion. This recovery was spurred by six major deals, each surpassing the $1
billion mark, suggesting pockets of resilience within the fintech ecosystem.
Moreover, a
separate analysis by Innovate Finance has revealed a contrasting trend in the
United Arab Emirates, where fintech funding witnessed an impressive surge,
growing 92%. This indicates that while the broader fintech funding
environment has faced headwinds, specific regions and deals, such as Monzo’s
forthcoming round, highlight the sector’s potential for significant
transactions and growth, even in a generally declining market.
The London-based
digital bank Monzo is in advanced talks to raise up to £350 million in a new
funding round that could value the company at around £4 billion. According to
sources familiar with the matter cited by Financial Times, Monzo is nearing a
deal and could finalize the fundraising in the next two weeks.
The new
round is expected to be led by CapitalG, Alphabet’s growth equity investment
fund, with participation from existing Monzo backers like China’s Tencent and the US
fintech specialist Ribbit Capital, among others. This new infusion of capital would further build on Monzo’s
last fundraising in 2021, which valued the company at £3.5 billion.
A step up
in valuation reflects improving investor sentiment towards financial technology
companies after a period of market turbulence. In recent years, rising interest
rates and tighter regulations have made investors wary of fast-scaling,
cash-burning startups. But, Monzo seems to have convinced backers of its
long-term potential.
🚨 𝗡𝗲𝘄𝘀 𝗙𝗹𝗮𝘀𝗵: @monzo is nearing a new round of funding that would value the British digital bank at about £4bn, according to people familiar with the matter.
The UK fintech could finalise a deal as soon as the next two weeks to raise as much as £350mn from a mix of… pic.twitter.com/wHIx6PsaSz
— Marcel van Oost (@oost_marcel) February 20, 2024
Since its
founding in 2015, Monzo has expanded well beyond its iconic coral pink debit
cards into areas like business banking, lending, investments and
buy-now-pay-later. It now counts over 9 million UK customers, including over
380,000 business clients. An international push is also underway, with Monzo
active in the US market.
Last year,
the digital bank doubled its revenues to £355.6 million and tripled its lending book to £759.7
million. Though it still posted a £116 million loss, the company said it turned
a profit in March 2023 and is on track to achieve full-year profitability soon.
With fresh
funds and continued growth, 2024 could be a landmark year for Monzo to
demonstrate it can transition from a buzzy startup into a sustainable digital
bank able to withstand economic turbulence. The £4 billion valuation affirms
investors’ confidence in Monzo’s future prospects.
Fintech and VC Funding
Plummet off a Cliff
As observed
in the financial landscapes of fintech funding in Europe and the UK in recent
quarters, the funding round Monzo aims to finalize stands out as one of the
larger endeavors, defying the adverse trends seen in the industry.
The latest KPMG
Pulse of Fintech report underscores the challenges within the fintech
sector, noting a significant downturn in investment across the globe in 2023.
Fintech investment plummeted to $113.7 billion from the previous year’s $196.3
billion, with the number of deals dropping to the lowest since 2017, totaling
4,547.
Despite the
overall decline, a marginal recovery was observed from the first to the second
half of 2023, with investments slightly increasing from $55.5 billion to $58.2
billion. This recovery was spurred by six major deals, each surpassing the $1
billion mark, suggesting pockets of resilience within the fintech ecosystem.
Moreover, a
separate analysis by Innovate Finance has revealed a contrasting trend in the
United Arab Emirates, where fintech funding witnessed an impressive surge,
growing 92%. This indicates that while the broader fintech funding
environment has faced headwinds, specific regions and deals, such as Monzo’s
forthcoming round, highlight the sector’s potential for significant
transactions and growth, even in a generally declining market.
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- Source: https://www.financemagnates.com//fintech/monzos-valuation-poised-to-hit-4-billion-in-latest-capital-raise/
