Monzo lands new cash from WeChat owner Tencent
Tencent joins new investors including the Abu Dhabi Growth Fund, the sovereign investment arm of the government of the United Arab Emirates, in the neobank’s latest round which values the business at $4.5bn (£3.3bn).
UK neobank Monzo has landed a fresh injection of funding from Chinese tech giant Tencent.
The Chinese company, which has a market capitalisation of $400bn, and owns financial super app WeChat, has invested $100m (£74m) as part of Monzo’s Series H round which values the company at $4.5bn (£3.3bn).
Monzo has had a good twelve months following a tough start to the pandemic. Its founder and CEO Tom Blomfield left the business in early 2021 citing mental health pressures and long term revenue generation for neobanks came under growing scrutiny from investors and regulators.
Losses increased to £129.7m for the year ending 28 February 2021, up from £113.8m in the same period in 2020 but 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.
TS Anil, the bank’s CEO of its US operation took over as its new boss, initially running its global operations from California before setting up base in London. It also started to see its push into premium subscriptions and SME banking pay off. Five million customers are now using Monzo, mainly in the UK.
In December 2021 it announced a huge new round of funding at a valuation more than 200 per cent higher than the last time it raised cash in 2020.
That £60m round, which closed in June 2020, meant a 40 per cent drop in its valuation to £1.25m owing to pandemic-induced uncertainty among investors around its long term future sustainability.
The new cash from Tencent brings Monzo's total haul to $600m for the round.
“The high level of investor interest we’ve had in this round is testament to our performance as well as the huge opportunity that lies ahead. With the backing of some of the best names in the investment community, we’re going into next year with big ambitions - and we’re just getting started,” Anil said in a statement to AltFi.