Former Monzo employees are petitioning the digital bank’s board to participate in the company’s upcoming secondary share sale, announced last week.
According to two people with direct knowledge of the matter, a group of 58 ex-employees at the UK neobank signed a letter to its board of directors requesting to be included in the secondary transaction. It’s understood that the signatories of the letter, many of whom were amongst the company’s first employees, made the request as they say they were pivotal in building the company in its initial stages.
Monzo announced the employee share sale, a type of secondaries deal which sees equity-holding employees cash in on their stocks, last Friday. Institutional investors including the Singaporean sovereign wealth fund GIC and investment firm StepStone Group are set to provide liquidity in the deal which will see Monzo’s valuation increase to $5.9bn.
It’s understood that only current employees at the bank are invited to participate and have the opportunity to cash in on up to 40% of their equity in the business. The letter also requested to lift restrictions on former employees selling their equity outside of the programme, for example on a secondary marketplace, one source told Sifted.
A spokesperson for Monzo said: “We recognise Monzo has been built by the many people who’ve worked here over the last nine years, both current and former employees, and we’re grateful for everyone’s contributions to make meaningful progress on our mission so far. The option to participate in the current secondary sale has been offered to current employees, to recognise their ongoing contribution, engagement and work towards our growth — which ultimately benefits our customers and all option and share holders of Monzo.”
The spokesperson did not provide any further details on the secondaries round or the petition by the former employees.
Monzo’s fundraising flurry
Since its founding in 2015, Monzo has grown to become one of the UK’s largest neobanks with over 10m customers and £11.2bn in deposits. Starting as a basic current account product with a prepaid card, it’s expanded into stocks and shares, buy now, pay later and is currently introducing a pension product. The neobank reported profitability for the first time this summer and announced plans to launch in the EU.
It’s in the process of setting up an Ireland office, while also planning to launch in the US for the second time.
It isn’t the only fintech to pursue a secondary transaction involving employee shareholdings recently. In August, Revolut secured a $45bn valuation in an employee share sale that involved investors such as Coatue, D1 Capital Partners and Tiger Global. UK-based payments company SumUp is also said to be planning a share sale that would value it close to $9bn.
This is Monzo’s third major fundraising this year. In March, it raised a $430m funding round at a $5bn valuation, minting at least 15 former and current staff as paper millionaires. In May, the digital bank secured an additional $190m in funding at a $5.2bn valuation.
