Monzo, the U.K. challenger bank now with more than 4.8 million customers, has closed another £60 million in funding, priced the same as and effectively an extension of its previous top-up round in June.
This saw Monzo valued by private investors at around £1.2 billion, marked by industry observers as a down round. It was lower than the upstart bank’s previous — perhaps overheated — valuation, before the coronavirus pandemic skewed leverage in favour of investors or forced a legitimate fintech market correction, depending on your perspective.
The new funding comes from a clutch of new backers, including Deliveroo and Stripe investor Novator, Kaiser and TED Global, as well as existing investor Goodwater. They join the likes of Y Combinator, General Catalyst, Accel, Passion, Thrive and Stripe, which all re-invested earlier this year.
It means Monzo has raised £125 million in funding since COVID-19 struck (an additional £5 million was quietly added during the last top up), and this current extension will be seen as good news for the bank as it looks to continue growing and increasing revenue lines beyond interchange fees.
To that end, Monzo shared some latest numbers with TechCrunch. In addition to approaching 5 million customers overall, it now has more than 60,000 business users — up from 25,000 signups in June — and more than 100,000 customers across its paid-for current accounts, Monzo Plus and Monzo Premium.
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Adds Monzo CEO, TS Anil, in a statement given to TechCrunch: “We’ve raised £125 million this year, achieved strong organic growth and are now nearing five million customers, all while becoming the most switched to bank in the U.K. and the top rated for overall service. This news demonstrates the confidence that both our customers and investors have in Monzo”.
Meanwhile, it has been a challenging time for Monzo, as it, along with many other fintech companies, has had to weather the coronavirus crisis and resulting economic downturn. This included utilising the U.K. furlough scheme and subsequently making around 80 employees redundant in the summer. In addition, there was a round of U.S. layoffs and the shuttering of its Las Vegas-based customer support office.
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Like some other banks and fintechs, the coronavirus crisis has resulted in Monzo seeing customer card spend reduce at home and (of course) abroad, meaning it is generating less revenue from interchange fees.
Separately, in May, Monzo co-founder Tom Blomfield announced internally that he was stepping down as CEO of the U.K. challenger bank to take up the newly created role of president. He was replaced as U.K. CEO by then U.S. CEO Anil, who also joined Monzo’s board in replacement of Blomfield.
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