The unicorn aims to accelerate market expansion and product development
Amid tough market conditions, digital bank Monzo has raised £340mn (€409mn) in new funding, reaching a post-money valuation of £4bn (€4.7bn).
The round was led by new investor CapitalG, the growth fund of Google’s parent company Alphabet. GV (Google Ventures, Alphabet’s venture capital investment arm) and HongShan Capital (a ChineseVC firm that split from Sequoia Capital last year) also participated, alongside existing investors including Passion Capital and Tencent.
Monzo says that the fresh capital will accelerate its business growth, product development, and expansion plans. It will also allow the London-based fintech startup to relaunch in the US, Monzo’s CEO TS Anil told the Financial Times.
Founded in 2015, Monzo’s online-only banking services quickly gained popularity and the company reached unicorn status in 2018. Despite financial instability and significant losses during 2020-2021, the startup said it became profitable in 2023 and now counts a total of nine million users in the UK.
UK pushes to retain fintech leadership
Monzo’s fundraising represents a notable boost to the UK’s fintech sector, which last year saw a 65% funding drop compared to 2022, reaching $5.1bn (£4bn) across 409 deals.
Despite this drop, the UK retained its leading place in fintech funding and innovation, securing more capital than the rest of the continent combined and ranking second in the global scene, behind only the US.
London plays a major role in this success, having emerged as a true fintech powerhouse over the past decade. But cementing leadership amid economic uncertainty, challenging market conditions, and increasing competition is no easy task.
Francesca Carlesi, CEO of Revolut UK, is calling for further action to ensure that the capital city is the place to go for fintechs. Speaking to Bloomberg, she said that even though London spearheaded the launch of digital banks after the financial crisis, “something has shifted in the last two or three years.”
For this reason, Carlesi joined other fintech founders and CEOs in the newly-launched Unicorn Council for UK Fintech (UCTF) — set up by industry body Innovate Finance.
The UCTF will identify scaling up barriers and will provide the government with policy recommendations that can support companies in their growth and drive greater direct foreign investment.
“In the last few years UK FinTech has shown resilience by maintaining its position as a global hub for investment,” Janine Hirt, CEO of Innovate Finance, said in a statement.
“To maintain our leadership we need to accelerate our work with industry, government, and regulators to ensure the necessary support for growth tech companies, including proactive regulation, and increased investment.”\nWe use cookies and other data for a number of reasons, such as keeping TNW sites reliable and secure, personalizing content and ads, providing social media features and to analyze how our sites are used.
Source: thenextweb.com