- Monzo secures £500 million in funding round led by Hedosophia
- Deal involves significant investment from GIC and Hedosophia
- Valued at over £4 billion, Monzo eyes profitability this year
In a round led by Hedosophia, an early investor in Uber and Airbnb, Monzo is raising around £500 million.
One of the most well-known technology investors in the world is involved in an enlarged fundraising that Monzo, the fintech that has grown to become one of Britain’s largest consumer banking firms, is completing this weekend.
Monzo and Hedosophia, an early investor in Uber and Airbnb, have reached an agreement for the latter to become a shareholder in the bank.
City sources claimed on Sunday that Monzo may declare as early as this week that Hedosophia and Singapore’s Government Investment Corporation (GIC) were taking part in a £500 million fundraising effort overall.
One of the biggest rounds ever completed by a British tech company, it is bigger than anticipated.
GIC was investing more than £50 million, according to an insider, and Hedosophia was contributing tens of millions of pounds.
Founded by Ian Osborne, who has supported some of the biggest tech companies in the world over the past 15 years, Hedosophia is an early-growth investor that refuses to comment.
Its backing of British tech firms includes the insurance company Marshmallow and the London-listed money transfer company Wise.
Given its increased fundraising, Monzo should not need any further funding if it chooses to go public in the following years as anticipated.
Following the completion of the first stage of its investment round, the digital bank, which has millions of customers in Britain, recently obtained a valuation of over £4bn.
Having been established in 2015, it is currently profitable and has expanded into investments and immediate access savings accounts.
By number of customers, it is now the seventh-biggest bank in Britain.
Capital G, the independent growth fund of Alphabet, the parent firm of Google, spearheaded the new fundraising.
The business is one of the new generation of banks that have surfaced since the last financial crisis and started to take a sizable chunk of the UK retail banking industry.
Rivals include Starling Bank, which just appointed Anne Boden, its founder, as its permanent chief executive.
Even after more than a year of discussions with authorities, Revolut—which was valued at $33 billion (£26.5 billion) in a financing round in 2021—has not yet been granted a UK banking license.
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Monzo has come a long way from a trying time two years ago when it became known that the City watchdog was looking into possible infractions of financial crime and anti-money laundering laws.
It is anticipated to be profitable this year, a significant milestone for a standalone digital bank, although historically it has been loss-making, as is the case with most start-ups, posting a loss of £116 million in the year to the end of February.
Monzo just changed the way it is structured as part of its plan to expand internationally in advance of a public market debut.
To prevent the business from being penalized financially by British authorities when it enters new foreign markets, Monzo Bank Holding Group was formed.
Among the current Monzo investors are Accel, General Catalyst, Passion Capital, and the Chinese conglomerate Tencent.
Leading Monzo is TS Anil, with Gary Hoffman, one of the most well-known bank executives in Britain, serving as chair.
