Monzo Bank Ltd, the mobile-only UK-based bank, has recently raised funds worth £85 million from US venture capital firms General Catalyst and Accel Partners. With this investment, the company has crossed the milestone valuation of over £1 billion, making it the most recent UK start-up technology company to accomplish this feat. The company has said that its family has crossed one million customers and now counts for nearly 15 percent of all new bank accounts that are being open in the country. The bank has recently made the move to current accounts from its pre-paid card system.
The company is also planning to undergo another crowdfunding financing round of £20 million. In November last year, the fintech company had raised £71 million in an equity investment round from the company Goodwater Capital. This is a big feat for the company considering its run of only three and a half years.
However, the market is highly challenging for the company in the UK. One of its closest competitors Revolut raised funds worth $250 million at the beginning of the year. The company presently has 2 million customers. Berlin-based start-up firm N26 is also planning to launch a challenger bank app soon in the UK.
The deal marks the first investment in the technology domain for venture capital firm General Catalyst, which has formerly invested in the food delivery firm Deliveroo. The funding, however, is more likely a way of earning some time and resources to recover for Monzo as the company continues to undergo losses. According to latest reports, the company had made losses worth of £33.1 million in the financial year ending in February 2018.