Monzo is poised to secure an additional £350m in financial backing from investors, one of which is a fund under the ownership of Google’s parent company Alphabet. This serves as a clear indication of support for the UK-based digital bank and has the potential to boost its overall value to £4bn.
The financial institution, recognized for its vibrant coral debit cards, had a previous valuation of $4.5 billion (£3.5 billion) following a $600 million fundraising in late 2021.
However, the anticipated support and investment from corporations like CapitalG, Alphabet’s investment fund, is predicted to provide a significant boost to the company before its anticipated initial public offering.
According to sources at The Guardian, it has been revealed that Monzo will be receiving investments from Chinese venture capital fund HongShan, US fintech investor Ribbit, and American investor StepStone for the first time. The funding process is set to be finalized within the next 14 days, as reported by the Financial Times.
They will contribute funds in addition to the current investors, which include Juniper, the investment company led by former Google CEO Eric Schmidt, as well as the venture capital firms LocalGlobal, Passion Capital, and Avra.
Monzo has gone from a scrappy newcomer luring millennials with its sleek app to a fully licensed bank with more than 9 million customers and 3,500 staff. The lender is expected to report its first annual profit in the coming months, nearly a decade after it was founded, in 2015.
Although Revolut has a valuation of $33bn (£26bn) in 2021, Monzo’s valuation has fallen significantly behind. However, Monzo has primarily focused on expanding within the UK and successfully obtained a banking licence from British regulators in 2016, something its competitor has not yet achieved.
In October, Sky News stated that Monzo had initiated discussions regarding fundraising. This development will likely lead to speculation about when Monzo will go public and if it will select London for its first offering.
If protected, it could be advantageous for Chancellor Jeremy Hunt, who has consistently expressed his goal of turning the UK into the next Silicon Valley and increasing tech-based listings on the stock market. He recently stated that he intends for the London Stock Exchange to become Europe’s version of Nasdaq.
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Monzo did not provide a statement. CapitalG has not yet responded to requests for a statement.
Source: theguardian.com
