Monzo set for £4.5bn valuation in employee share sale
Monzo is launching a secondary share sale that is set to value the digital challenger bank at £4.5bn, City PM has learned.
Hundreds of employees are expected to sell tens of millions of pounds-worth of stock as part of a deal backed by Monzo’s existing investors, it is understood.
The sale is said to involve existing investors, including StepStone Group and Singapore’s sovereign wealth fund GIC, which have agreed to buy stock from employees.
The bank is planning to announce the share sale on Friday, it is understood.
Monzo declined to comment on Thursday.
A £4.5bn valuation would mark an uplift from the $5.2bn (£4.1bn) price tag Monzo achieved in a May funding round and cement its status as one of Britain’s biggest tech start-ups.
Monzo, which employs around 4,000 people, has raised $610m (£490m) in funding this year alone.
The firm was founded in 2015 and has since amassed more than 10m customers to become the UK’s seventh-largest bank by this metric.
Its rivals include Starling and Revolut, which itself secured a $45bn (£34.9bn) valuation in an August secondary share sale.
Monzo reported its first annual profit of £15.4m in June and has plans to enter the European market through an office in Ireland.
The bank is also plotting a return to the US market after being told by regulators in 2021 that it was unlikely to secure a banking licence there after two years of negotiations.
Having launched an investment product backed by Blackrock last year, Monzo is readying a pensions offering, as well as exploring partnerships with lenders to offer a mortgage product that would further boost competition with major retail banks.
The latest share sale will fuel speculation that Monzo is gearing up for a big-ticket stock market listing in the coming years.
Chief executive TS Anil has hinted that the firm will float at some point but has been tight-lipped on the timing or location, telling City PM in June that it was “too early” to discuss.
Despite staging a rebound in recent months, equity capital markets activity remains subdued compared to a peak in 2021. As a result, many late-stage venture-backed firms have used secondary sales to offer investors and early employees more liquidity.
Monzo’s share sale, first reported by Sky News, comes just weeks before Chancellor Rachel Reeves is expected to increase the rate of capital gains tax in Labour’s Budget on 30 October.