Monzo, the UK-based digital bank backed by telecommunications firm Orange and digital payment technology provider Stripe, is close to raising funding at a £1.25bn ($1.53bn) valuation, the Financial Times has reported.
The company is targeting roughly $85m to $98m in the round, according to several people familiar with the negotiations, and expects to get most of the funding from existing investors. It had reportedly been in talks to raise money in December 2019 in preparation for a larger round this year.
Founded in 2015 as Mondo, Monzo operates an online bank that offers a current, savings and business accounts, loans and overdrafts.
The forthcoming round is expected to close within the next month, with the proceeds to help the company get through the coronavirus-fuelled economic crisis to the second half of 2021, when it was looking to reach profitability.
The prospective valuation would represent a 37.5% drop from Monzo’s last round in June 2019, when it secured $144m at a valuation of £2bn ($2.55bn at contemporary exchange rates).
The 2019 round was led by Y Combinator’s Continuity Fund and included Orange subsidiary Orange Digital Ventures, Stripe, General Catalyst, Passion Capital, Latitude, Thrive Capital, Accel and Goodwater Capital. It boosted the company’s overall funding to more than $385m.
Monzo had closed a $108m round in late 2018 that was led by General Catalyst and backed by Accel and undisclosed existing investors at a $1.28bn pre-money valuation.
Goodwater Capital led a $93m round for Monzo in November 2017 that included Stripe, Orange Digital Ventures, Passion Capital, Thrive Capital and Crankstart Foundation.
Orange Digital Ventures, Thrive Capital and existing investor Passion Capital had provided $24.5m in funding nine months earlier.
Image courtesy of Monzo Bank Limited.
