London-based digital bank Monzo is preparing to secure a significant boost in funding, reportedly to the tune of £500 million, according to sources cited by Sky News. The injection is expected to involve investments from Hedosophia, known for its early backing of tech giants like Airbnb and Uber, as well as Singapore’s Government Investment Corporation (GIC).
This substantial funding round positions Monzo among the largest capital raises ever witnessed by a UK tech firm. Insider reports suggest that GIC is set to contribute over £50 million, with Hedosophia also pledging tens of millions of pounds. Notably, Hedosophia’s investment portfolio includes notable tech ventures such as Wise and Marshmallow.
Monzo’s latest funding initiative follows its recent success in securing $430 million from prominent investors such as CapitalG, Alphabet’s independent growth fund, GV (Google Ventures), and HSG (HongShan Capital), along with ongoing support from existing backers Passion Capital and Tencent. This previous round propelled Monzo’s valuation to a staggering $5 billion.
The imminent funding surge marks a significant milestone for Monzo, which had previously secured $500 million in funding in 2021, valuing the company at $4.5 billion.
Founded in 2015, Monzo has emerged as a leading player in the UK’s consumer banking landscape, boasting millions of customers. The digital bank has not only achieved profitability but has also diversified its offerings to include investments and instant access savings accounts. With its rapid growth, Monzo now ranks as the seventh-largest bank in Britain based on customer numbers.
Monzo’s success mirrors the rise of a new generation of banks since the financial crisis, challenging traditional players and capturing a sizable share of the UK retail banking market. Competitors like Starling Bank and Revolut are also vying for dominance in this space, with the latter commanding a valuation of $33 billion following a funding round in 2021.
Despite facing regulatory scrutiny in the past, Monzo has rebounded resiliently, overcoming challenges to emerge as a profitable entity. The bank’s strategic restructuring and international expansion efforts underscore its ambitions for sustained growth and potential future public listing.
Led by CEO TS Anil and chaired by industry veteran Gary Hoffman, Monzo continues to attract investment from a diverse array of backers, including Tencent, Passion Capital, Accel, and General Catalyst. As the digital banking sector continues to evolve, Monzo’s latest funding infusion positions it for further expansion and innovation in the competitive fintech landscape.