After raising £20 million with us in their third crowdfunding round in 2018, challenger bank Monzo has just closed a new £113 million funding round led by YCombinator (YC) Continuity. This brings Monzo’s post-money valuation to a massive £2 billion. Both new and existing investors have pledged alongside YC Continuity, including Latitude, General Catalyst, Stripe, Passion Capital, Thrive, Goodwater, Accel and Orange Digital Ventures.
The Monzo team plan on using this capital, alongside the finance generated from their raise last year, to power the business’ growth and sustainability, as well as further their plans for a US launch.
With over 2 million customers and more than 200,000 new sign-ups per month, Monzo has asserted itself as the UK’s fastest growing bank. Community has always been key to the company’s growth, with many customers backing their crowdfunding campaigns over the last few years.
Monzo’s crowdfunding history
- 2016: £1 million raised in 1 minute 36 seconds
- 2017: £2.3 million raised with the help of over 6,400 investors
- 2018: £20 million raised in 2 days with the help of 36,000 investors
CEO Tom Blomfield commented on the announcement, saying: “It’s so exciting when amazing investors back our mission to transform banking and make money work for everyone. With more than 2 million customers we’ve come a long way since we started but there’s still a lot more to be done - by listening to our community we’ll keep working hard to deliver the products our customers need to give them better control of their finances.”
So what does this mean for existing investors?
While there are now a larger number of shares, the potential return is greater due to the rise in valuation. Essentially, the investment will have increased in value. In fact, if you invested in the first crowdfunding round in 2016, your shares would have increased in value 25x.
We caught-up with Henrik Wetter-Sanchez, an early investor in Monzo, to get his thoughts on their announcement:
“I actually invested in Monzo back in 2016! I had invested in a dozen startups through Crowdcube before I came across Monzo and it immediately fell into that category of ‘why has nobody done this before’. Camden Town Brewery did the same with craft beer and Tom Blomfield was promising to do the same with banking.”
“I invested because at a macro level, people’s trust and satisfaction with their banks was at an all-time low, creating the perfect foundation for the ideal execution that could arguably only come from a team such as Tom’s, with their GoCardless and Starling experience. People were ready to rethink the way they banked and Monzo re-defined the banking experience for our new generation."
"Today’s news of their latest funding round and new £2bn valuation is incredibly exciting. The reason I was drawn to Crowdcube and have used the platform so much is because I believe in their mission to democratise investing. In this tech gold rush, enabling everyone to share in the success of our best new companies is essential. Not only financial success, which potentially comes ever closer for Monzo’s crowd of investors, but also feeling part of their journey. Seeing the transformation from the vision I invested in 2016, to 2 million people using the app is inspiring.”