Monzo secures additional £60m in funding
Digital bank Monzo has topped up its earlier fundraising round with an additional £60m in funding, bringing its total raised this year to £125m.
The challenger bank had previously closed a £65m top-up in June at a reduced valuation of £1.2bn, down from £2bn.
The latest funding, first reported by TechCrunch, is effectively a top-up of the June round and has been priced at the lower valuation.
The funding has come from new backers including Deliveroo and Stripe investor Novator, Kaiser and TED Global as well as existing investor Goodwater. They join existing backers Y Combinator, General Catalyst, Accel, Stripe and Passion Capital who re-invested earlier this year.
It is a positive sign for the bank, which has struggled with the effects of the coronavirus pandemic on its business. Monzo warned there was “significant doubt” about its ability to continue at a going concern earlier this year ahead of a second national lockdown.
The bank was also forced to cut 120 jobs in May and closed its US office as the pandemic weighed on the bank’s operating capacity.
As part of plans to expand and increase its revenues beyond interchange fees, Monzo launched a new premium service two months ago in an attempt to convince more customers to pay for its services after reporting losses more than doubled to £113.8m last year.
Figures shared with TechCrunch show Monzo has increased its business users from 25,000 in June to 60,000, bringing overall customers to nearly 5m.
In a statement chief executive TS Anil said: “We’ve raised £125m this year, achieved strong organic growth and are now nearing 5m customers, all while becoming the most switched to bank in the UK and the top rated for overall service.”