fintech company based in London Monzo raised a late-stage funding round of $430m (£340m), confirming a report from the Financial Times a few weeks ago. Following this round, the company reached a post-money valuation of $5bn (£4bn). Founded in 2015, Monzo provides UK current accounts, debit cards and many financial products with a digital-first approach.
Today’s investment is an important piece of information, as huge funding rounds have become rare over the past year — unless you’re working on an AI startup model.
We remind you that according to Atomico’s latest report on the state of European technology, startup funding has fallen to $45 billion in 2023 compared to $82 billion in 2022 and $100 billion in 2021. American VC firms have withdrawn from European investments and crossover investors such as Tiger Global or Coatue have drastically slowed down their pace of investment in tech startups.
That’s why Monzo is somewhat defying the odds with this new round of funding, with Google playing a big role in this investment. CapitalG, the growth fund of Google parent Alphabet, is leading the round. GV, Google’s venture fund, is also involved, as well as HongShan Capital (the VC firm formerly known as Sequoia Capital China) and existing backers such as Passion Capital and Tencent.
And yet, Monzo’s trajectory isn’t always up and to the right. After growing well in its home market, the company tried to expand into other markets, including the US, but Monzo ended up shutting down its US team and refocusing on the UK
In 2020, it even had to raise a seed round, meaning its total valuation dropped between two funding rounds. A few months later, its iconic founder and CEO Tom Blomfield left the embattled bank. Now it is a partner at Y Combinator.
The company’s performance improved rapidly, partly due to rising interest rates. The startup now generates revenue from cash and central bank balances. Monzo hit a $4.5 billion post-money valuation in 2022.
Monzo has nine million retail customers in the UK In 2023 alone, the company added two million customers. There are also 400,000 companies using Monzo for their banking needs.
In addition to checking accounts and debit cards, Monzo has diversified its product portfolio with savings accounts, access to three ETFs and some credit products. Essentially, Monzo still believes it can create a one-stop shop for all your financial needs. The company says it will become profitable in March 2023.
