UK-based digital bank Monzo secured £113m ($144m) yesterday in a funding round featuring telecommunications company Orange’s corporate venturing, arm Orange Digital Ventures, and payment technology provider Stripe.
Accelerator operator Y Combinator led the round through its Continuity Fund, while Latitude, General Catalyst, Passion Capital, Thrive Capital, Accel and Goodwater Capital also took part.
The round took the company’s valuation to more than $2.5bn, confirming rumours concerning the round that first emerged two months ago.
Monzo operates a digital bank that is available exclusively through a mobile app. It has been working to turn itself into a marketplace for a range of finance-oriented services, offering features such as the ability to switch energy providers, and is gearing up to introduce business accounts.
The company has doubled its customer base to more than 2 million since its last round in October 2018, and claims it now turns a profit of about $5 on each user who signs up, compared to a $19.70 loss previously.
The capital will drive US expansion plans Monzo announced last week, with an initial launch to take place in the city of Los Angeles.
Monzo has now secured more than $385m in funding, in addition to more than $31m raised through equity crowdfunding campaigns. It was valued at $1.28bn when it raised $108m in October 2018 from a consortium led by General Catalyst.
Orange Digital Ventures and Stripe had previously invested in a $93m round for Monzo in late 2017 that was led by Goodwater Capital and backed by Crankstart Foundation, Passion Capital and Thrive Capital.
That round reportedly included $14m in secondary funding, in which early staff members sold shares. Orange Digital Ventures, Thrive Capital and Passion Capital had already contributed to a $24.5m round in February 2017.
