Monzo plans to secure £350m from investors pre-listing

The digital bank’s funding round is led by CapitalG, Alphabet’s parent company Google’s investment arm

Monzo is poised to secure an additional £350m in funding from investors, including Alphabet’s parent company Google’s investment fund CapitalG. This move signals a strong vote of confidence in the UK digital bank, potentially pushing its valuation to £4bn.

The bank, renowned for its distinctive hot coral-coloured debit cards, was most recently valued at $4.5bn (£3.5bn) following a $600m fundraising round in late 2021.

Investor interest from firms such as CapitalG is anticipated to provide Monzo with a significant boost, particularly in light of its anticipated stock market debut.

According to The Guardian, Chinese venture capital fund HongShan, US fintech investor Ribbit, and American investor StepStone will all be acquiring stakes in Monzo for the first time. The funding round is expected to be finalized within the next two weeks, as reported by the Financial Times.

In addition to existing investors such as Juniper, the investment firm of former Google CEO Eric Schmidt, and venture capital firms LocalGlobal, Passion Capital, and Avra, they will also provide funding.

Monzo has transitioned from a scrappy newcomer enticing millennials with its stylish app to a fully licensed bank with over 9 million customers and 3,500 employees. The lender is projected to announce its inaugural annual profit in the upcoming months, nearly ten years after its establishment in 2015.

While Revolut was valued at $33 billion (£26 billion) in 2021, significantly ahead of Monzo, the latter has primarily concentrated its growth efforts in the UK. Monzo achieved a notable milestone by obtaining a banking license from British regulators in 2016, a feat its rival has yet to accomplish.

In October, Sky News reported that Monzo had initiated discussions regarding the fundraising. Its successful completion will likely prompt speculation about the timing of Monzo’s initial public offering (IPO) and whether it will opt for London as its listing venue.

If successful, this fundraising could be a significant achievement for Chancellor Jeremy Hunt, who has consistently expressed aspirations to position the UK as the next Silicon Valley and enhance tech-focused stock market listings. He recently expressed his desire for “the London Stock Exchange to become Europe’s Nasdaq.”

Monzo chose not to provide a comment. CapitalG did not respond to requests for comment immediately.