Challenger Monzo to cement £4bn valuation in new funding round
Monzo is set to cement a valuation of around £4bn in a fresh round of funding, despite growing headwinds in the challenger bank sector, City PM understands.
The challenger bank could finalise a deal by the end of the month to raise as much as £350m of capital, people familiar with the matter told the FT.
Monzo was founded in 2015 and has become one of Britain’s biggest digital banks, alongside Starling and Revolut.
In 2021, the Abu Dhabi Growth Fund led a $600m funding round that valued the bank at $4.5bn (£3.6bn).
However, many challenger banks have seen their valuations cut following their boom in the pandemic, with Starling seeing its valuation slashed from £2.5bn to £1.5bn at the end of 2022.
Meanwhile, Revolut saw its valuation cut by around 40 per cent last year, with Molten Ventures saying it had significantly written down its stake in the bank.
In November, it was reported that Alphabet’s investment fund, Capital G, was closing in on a deal to lead a funding round valuing Monzo at more than £4bn, raising between £300m and £500m for the bank.
Last week, the bank announced that it had reached nine million customers, with two million joining in 2023. Throughout the year, it added more than 380,000 business customers.
Monzo declined to comment.