Monzo, one of Europe’s fastest growing digital challenger banks, has doubled its valuation in its biggest funding round to date.
The startup has raised a further £71m at a valuation of £280m in a round led by Silicon Valley investment firm Goodwater Capital.
The payments service Stripe, Silicon Valley investor Michael Moritz and existing investors Passion Capital, Thrive Capital and Orange Digital Ventures also invested. In addition, a £1.5m pot has been set aside for previous crowd-funders to reinvest.
Monzo’s user base has grown from 120,000 to 470,000 since it raised £22m in February, indicating the company is on track to reach its target of registering at least 500,000 users by the end of the year.
Tom Blomfield, Monzo’s co-founder and CEO, said the funding would be be used to further grow its team of 210 employees, who are currently rolling out current accounts and building the app’s marketplace offering.
Monzo started out by giving its users a pre-paid debit card with an app that records payment data in real-time. But Blomfield has said that he sees the company ultimately becoming a “control centre” for people’s finances.
The vision, as Monzo’s partnership manager Phil Hewinson explained to NS Tech in July, is to build a marketplace for users to find ways of easily cutting down on their spending. If users switch utility providers through the app, Monzo would take a cut of 5-10 per cent of any savings made.
“One of the biggest carrots for partners will be new user acquisition,” Hewinson said. “We’re looking for companies that have the same sort of values as us that can provide value to users. We’re really keen on targeting users in a highly relevant way.”
Pre-paid card users currently cost the company between £50 to £60 a year, but it’s hoping to halve that cost by moving all existing users over to current accounts by the end of the year. Launching lending products and the marketplace will enable the bank to start generating money from users over the next few months.
Chi-Hua Chien, Managing Partner of Goodwater Capital said Monzo’s growth in the UK had been incredible: “[It] is already making it as simple and seamless as possible for almost half a million people to manage their money, and we’re looking forward to helping the team bring Monzo to millions more, in the UK and beyond.”