Monzo, a UK-based mobile financial services provider backed by telecommunications firm Orange, is set to raise £100m ($130m) in funding from a new, unnamed US-based investor, the Sunday Times has reported.
The transaction has been approved by Monzo’s board of directors, but could take several months to receive approval from regulator the Prudential Regulation Authority, according to the newspaper.
The deal would double Monzo’s valuation to $2.6bn, making it the UK’s second most highly valued fintech company, behind OakNorth, a digital lender that secured $440m in a round led by telecoms and internet group SoftBank two months ago.
Founded in 2015, Monzo operates a digital bank that lets consumers open and manage current, joint and savings accounts through a mobile app. It secured its full banking licence in 2017, having originally offered only a prepaid debit card.
The company has grown its customer base to 1.2 million but has yet to become profitable, suffering a $45.6m pre-tax loss in the year running up to February 2018, a fourfold increase on the previous 12-month period.
Monzo has already raised more than $241m in equity financing, on top of more than $31m obtained through equity crowdfunding campaigns.
The company received $108m in an October 2018 round led by venture capital firm General Catalyst, subsequently adding $25.5m in a December equity crowdfunding campaign backed by more than 36,000 individuals in just over two days.
Orange Digital Ventures, a corporate venturing subsidiary of Orange, contributed to a $93m round for Monzo in late 2017 that was led by VC firm Goodwater Capital, with additional participation from online payment technology provider Stripe, Crankstart Foundation, Passion Capital and Thrive Capital.
The 2017 round reportedly included $14m of shares bought from early members of staff through a secondary share transaction, and was followed by an equity crowdfunding campaign where existing individual backers invested approximately $1.2m.
Monzo had already collected $24.5m in a February 2017 round backed by Orange Digital Ventures, Thrive Capital and Passion Capital, before adding $3m through a crowdfunding campaign the following month.
