8.6 C
New York
Wednesday, February 24, 2021
Home Challanger banks Monzo valuation drops by 40% as it seeks funding

Monzo valuation drops by 40% as it seeks funding

Monzo bank seeks a new round of funding. That would value the business at £1.25bn. This would mean a 40% drop from its most recent valuation of £2bn last year.

The digital challenger is looking to raise around £70-80mln to strengthen its balance sheet in a round which is expected to close in the next month as FT reported.

Read also: Monzo hires veteran Dave Laramy as new VP and head of global financial crime

According to the FT, the majority of the funding will come from existing shareholders such as Accel, Y Combinator Continuity, Goodwater Capital, and Passion Capital rather than new investors.

“It’s not ideal but it’s also not surprising — nobody is paying silly money in this climate,” one VC told Sifted, indicating that Covid-19 will force most private consumer fintechs to adjust their valuations.

The VC also added that Monzo had perhaps been overly optimistic with its £2bn price-tag last year.

In April Monzo’s founder and CEO Tom Blomfield decided to give up his salary for the next 12 months as top executives willingly took pay cuts to ensure that their staff still received their salaries.

Read also: Monzo’s CEO won’t take his salary for 12 months

However, Monzo has also had to furlough 295 members of staff and it has shut down its Las Vegas customer support center.

But the US expansion is still on for Monzo since it has recently applied for the US banking license as the customer support jobs will be likely just moved to Europe and handled by the night shift.

Monzo today has over 4 million UK customers, it raised over £300m in funding to date and was the banking company that received most net switches (new customers minus lost customers) in Q4/2019.

Avatar
Jan Cerny
Jan is an innovation enthusiast and Fintech news reporter. He specializes in news distribution, social media, and content analysis.

Recent posts

TransferWise gets rebranded as ‘Wise’

The rebranded company Wise drops the part Transfer as a signal of moving on from the money-transfer focus of the company.

Revolut about to increase fees and cut number of free trades

Revolut introduced additional fees on its free plan and trading on the Revolut platform will also become more expensive.

Exclusive: An interview with Michael Schweikart, a co-founder of the sustainable banking provider Tomorrow

Tomorrow is a social business FinTech company and a neobank, that was started in 2018 by founders Inas Nureldin, Jakob Berndt, and Michael Schweikart with a vision to use money as a lever for positive change. Since its launch in 2018, the company has 50+ employees and 55,000+ customers.

N26 introduces 100% digital account

The German digital bank has just announced the launch of a 100% digital N26 Standard account equipped with a virtual card.