Monzo has raised a $430m funding round at a $5bn valuation as it eyes expansion into the US market.
Leading the round is CapitalG, Google parent company Alphabet's growth fund, with additional participation from Google Ventures, HongShan Capital and existing backers Passion Capital and Tencent.
The fresh capital will be used to accelerate expansion plans and increase its suite of products. The banking startup has recently introduced Monzo Flex, a buy now pay later product, alongside a cashback product and a mortgage tracker.
The company is set to use the funding to build out its forthcoming pension product and renew its US expansion efforts. Last year, the digital bank hired former CashApp head of product Conor Walsh to spearhead efforts stateside.
The neobank last raised funding in 2021 at an increased valuation of $4.5bn after a turbulent 2020-2021. Notably, auditors expressed “material uncertainty” over its ability to survive as a business as a going concern in its 2020-21 annual results. At the time it also withdrew its US banking license application.
In recent years, however, the neobank has experienced a resurgence. Expanding into lending has appeared lucrative for Monzo — it was able to more than double its revenue by tripling its lending book, according to its May financial results.
The company, which was founded in 2015, says it has more than 9 million retail customers and anticipates a path to profitability.
However, its valuation pales in comparison to some of its European neobanking counterparts. Revolut last secured primary funding at a $33bn valuation and N26 continues to boast a $9bn valuation at its previous time of raising. Starling and Revolut achieved their first annual profitability figures last year when the companies filed their 2021 annual results.
