Monzo closes £60m funding round at a 40% discount

Monzo has closed a £60m funding round at a 40 per cent drop in its valuation, first reported by Business Insider.

The latest funding comes from a combination of both new and existing investors, including Y Combinator, General Catalyst, Accel, Stripe and Passion Capital.

Currently, there are only two known new investors, Swiss investment fund Reference Capital and Vanderbilt University. 

Last month it was revealed that Monzo was looking to raise between £70m and £80m at a discounted price following the impact of coronavirus.

In a note to participants in previous crowdfunding efforts, Monzo wrote: “Closing a new round is great news for Monzo. Our investors continue to support our mission to make money work for everyone.” 

“This means we can keep growing and building products that give people more control over their money – even in the current economic climate.”

Monzo’s latest valuation places it closer to its 2018 valuation of £1.25bn, a step down from the £2bn valuation it received this time last year following a £113m Series F raise. 

Monzo also noted that shares in the digital bank are now worth £7.7145, the same as they were worth back in December 2018 and a significant decrease from the £13.0194 they were worth in June 2019.

To make up for the gap in value, Monzo has issued additional shares to investors who took part in the Series F round to “put them in the same position as if they’d invested then at a share price of £7.7145.”

Of late, Monzo has faced a series of hurdles owing to the economic turmoil created by the coronavirus pandemic.

It was one of the first fintechs to furlough staff, placing 295 employees onto the government-backed scheme on a voluntary basis and top executives took a 25 per cent pay cut, as well as co-founder Tom Blomfield giving up his salary entirely.

Just shy of a month ago, it was also revealed that Blomfield would step down from the CEO role and assume the position of President, leaving US CEO TS Anil to step into the group CEO position.

Despite this, Monzo launched its application for a US banking licence in April as it sets its sights on stateside expansion.