Monzo lands $475m round of funding as valuation soars to $4.5bn

Digital neobank pioneer Monzo has closed a huge new round of funding, at a valuation more than 200 per cent higher than the last time it raised cash in 2020. 

Monzo raised $475m from new investors including Abu Dhabi Growth Fund, the sovereign investment arm of the government of the United Arab Emirates.

The news, which was first reported by the Financial Times, comes a year after it last added money to its coffers with a $60m addition to its down round at a valuation of £1.25bn. This was 40 per cent lower than its previous round in 2019 following a tumultuous period for the bank.

After a difficult 2020 that saw the departure of founder and CEO of Monzo Tom Blomfield in early 2021, the bank’s fortunes seem to have been improving with five million customers now using Monzo.

While it saw losses increase to £129.7m for the year ending 28 February 2021, up from £113.8m in the same period in 2020, it has seen business customers grow in recent months to reach 100,000 and it launched its new BNPL feature ‘Flex’.

Its customer deposits soared by £1.7bn to more than £3.1bn in 2021 while its revenues also increased from £67m in 2020 to £79m in 2021.

"This investment means we'll grow further and faster as we continue on our journey to reinvent banking, and become the one app that sits at the centre of our customers' financial lives," Monzo CEO TS Anil said in a statement to Reuters.