The UK has gained yet another digital banking unicorn, with Monzo this morning announcing an £85m fundraise.
The round gives the bank a valuation of more than £1bn. Monzo thus joins fellow banking challengers Revolut,Atom Bank and OakNorth in the hallowed ‘unicorn’ club – inhabited by privately held tech start-ups with valuations upwards of $1bn.
Founded in 2015, Monzo’s app and hot coral card offering has blasted its way to over one million customers, a feat it achieved in September. More so than any of its rivals in the digital banking sector, Monzo has focused relentlessly on perfecting its core current account offering, while others have dedicated more effort to building out various kinds of add-on services, like insurance and mortgages.
Monzo has accompanied its last few institutional investment rounds with fundraises on equity crowdfunding platform Crowdcube. The bank last raised money almost exactly a year ago – a £71m round led by Goodwater Capital and Stripe, with £1.5m set aside for existing crowdfunding investors to take part. In February of 2017 it closed a £19.6m Series C, which was preceded by a £2.5m crowdfunding round.
Tristan Thomas, head of marketing and community at Monzo, said in an interview with AltFi in April: “The limit in the EU is €8m for a normal crowdfunding round. As you say, that probably isn’t worth doing. There are ways to raise a larger amount of crowdfunding that involve a bunch more work – writing a prospectus and things like that. We’re looking to do that sort of raise.”
Commenting on the £85m Series E, Monzo’s co-founder and CEO Tom Blomfield said: “We started Monzo because we wanted to make a positive difference to people’s financial lives. It’s incredible that more than one million people are now using Monzo and a testament to all the hard work that’s gone into building the company over the last three-and-a-half years. While we’ve come a long way, we feel we’re still very much at the start of the journey. I’m really excited to be working with two new world-class investors to help bring Monzo to millions more people.”