VCs support USD 475m first close of Monzo's latest round

The second close of the round is expected later this month.

The Abu Dhabi Growth Fund (ADG) has led the round and is a new investor in Monzo. New investors Coatue and Alpha Wave Ventures also joined the round.

Existing investors participating in the round include Accel, General Catalyst, Goodwater, Passion Capital, Octahedron and Thrive Capital.

The round follows a challenging period for Monzo under the UK's various coronavirus lockdowns that saw its valuation fall from GBP 2bn to GBP 1.24bn, according to press reports. However, 2021 has seen the company's turnover double, with roughly 25% of its revenues coming from products launched during the pandemic.

Proceeds from the round are expected to be used to accelerate Monzo's continuing growth.

According to Unquote Data, banks have raised EUR 2.7bn to date via growth capital and venture deals since the start of 2021, versus almost EUR 1.3bn in 2020.

Several digital banks raised significant amounts as Europe emerged from coronavirus lockdowns earlier this year. Rounds raised in 2021 include Germany-based N26, in which new Monzo backer Coatue also invested; the VC led a EUR 900m Series E round for the company in October 2021 at a USD 9bn valuation. In the UK, Fidelity and the Qatar Investment Authority led a GBP 272m funding round for Starling Bank in March 2021 with a pre-seed funding valuation of GBP 1.1bn.

Previous funding
Monzo raised a GBP 2m seed round in June 2015, backed by Passion Capital and additional private investors.

Passion Capital led a GBP 5m round for Monzo in February 2016, followed by a GBP 4.8m round in October that year that valued Monzo at GBP 50m, according to Unquote Data.

Thrive Capital and Passion Capital took part in a GBP 19.5m round in February 2017, followed by a further GBP 71m funding round in November that year, which saw Goodwater Capital, payment technology company Stripe and Orange Digital Ventures join the shareholder base.

The company raised a total of GBP 103m from 2015 to 2017 via its funding rounds and two crowdfunding campaigns.

General Catalyst led a GBP 85m round for Monzo alongside Accel in October 2018.

Y Combinator Continuity led a GBP 113m Series F funding round for Monzo in June 2019. LocalGlobe also took part via its Series B-focused vehicle Latitude, alongside existing investors General Catalyst, Stripe, Passion Capital, Thrive, Goodwater, Accel and Orange Digital Ventures.

According to media reports at the time, the funding round valued Monzo at around GBP 2bn, double the valuation it had following its previous funding round in 2018.

In June 2020, Y Combinator, General Catalyst, Accel, Stripe, Goodwater, Orange Digital Ventures, Thrive and Passion Capital backed a GBP 60m funding round for Monzo, giving it a valuation of GBP 1.24bn. New investors Reference Capital and Vanderbilt University also joined the round.

Investors including Deliveroo, Novator, Kaiser and TED Global backed a GBP 60m round for Monzo in December 2020.

Nikesh Arora, AME Cloud Ventures, Octahedron Capital and Vetamer Capital provided GBP 75m in fresh capital for Monzo in February 2021.

Company
Founded in 2015, London-headquartered Monzo is a digital bank that offers both business and personal accounts, as well as features including bill splitting, energy switching, and its newly launched borrowing service. The bank has five million users and is currently adding around 100,000 new users per month. More than 300,000 of its customers are using personal or business accounts. Monzo employs 2,100 staff, a 60% increase since January 2021.

People
Monzo – TS Anil (CEO).

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