The digital bank is raising new funds to bolster its growth ambitions from a Funding Circle and Deliveroo backer.
Profitability, or the current lack of it, is one of the favourite bugbears of sceptics of the rapidly growing app-only banking model.
Clearly some venture capital investors disagree. Digital banking darling Monzo, which launched two years ago, is raising new cash from Silicon Valley investors pushing its valuation to a heady £1.2bn ($1.5bn), according to sources speaking to the FT.
Accel Partners, a Silicon Valley based venture capital firm is taking part in the new funding round, the FT also reports. The firm is no stranger to the UK, it has also invested in Funding Circle and Deliveroo.
Details on the new fundraise are scant and Tom Blomfield, CEO of Monzo, declined to comment to AltFi on the new fund raise but said at a recent roundtable hosted by Liberum, that the bank could be heading for profitability sooner than many might think.
“Our current financial models I think are putting us reaching cash-flow positive in 2020, but we’re working really hard to bring costs down and drive revenue to get to cash-flow positive some time in 2019,” he said.
“We’ve just hit contribution margin positive on our newest cohort in the last couple of weeks, so we’re well on our way.”
Mark James, head of alternative finance at Liberum, said: "continuing its exponential customer growth , and navigating a route through to profitability are going to be crucial for Monzo to grow into its valuation.”