British digital banking startup Monzo is set to tap investors for a third time since the start of the pandemic, topping up a round that began in the summer of last year with another £50m.
A person close to the firm said the top-up comes after Monzo fielded more demand from investors in response to “strong revenue growth and performance despite the pandemic”.
The additional investment of £50m, which has not yet been fully signed off, brings the digital bank’s total fundraising during the Covid-19 crisis to more than £170m.
The money will come from existing shareholders and one new investor, the Silicon Valley firm Octahedron Capital, according to reports.
Monzo now has close to 5m customers, up from 1.3m in 2019. Weekly revenues are 30% higher than they were prior to the pandemic, the person close to the firm said.
Boosting the business’s financial performance has been a key priority for TS Anil, who took over from founder Tom Blomfield as chief executive in May 2020. Blomfield carried on in the role of president, but left the startup for good in January.
In July of 2020, the startup reported an annual post-tax loss of £113.8m for the financial year 2020, more than double what it lost the previous year.
In the same month, Monzo’s premium account — Monzo Plus — went live, offering customers exclusive features and cheaper products for £5 a month. Monzo Premium, with still more perks for £15 a month, launched in October. The neobank has amassed more than 100k paid subscribers across the two accounts during the past five months.
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Monzo’s newly-extended funding round officially began in June 2020, when the startup secured an investment of £60m at a pre-money valuation of £1.24bn — 40% lower than the valuation negotiated when it pocketed £113m in June 2019. It was first topped up in December with £60m.
The latest £50m investment will take place on the same financial terms as the rest of the round has, another person close to the bank told Sifted.
The round keeps being extended, the person said, in order to take advantage of continued investor demand.
“Monzo kept getting more interest – even from people who already invested, kept watching company performance and asked if they could add to their first amounts,” they added.