Monzo, one of a number of new digital only or so-called ‘challenger’ banks in the U.K. aiming to re-invent the current account, is closing in on new funding, which could be announced as early as this week.
According to multiple sources, U.S.-based Thrive Capital is leading the round. However, I’ve been unable to peg the exact investment amount, with one source telling me it is around £30 million, while another says it is less than that but certainly more than £20 million. I also understand Monzo is planning to launch a second equity crowdfunding campaign shortly, too.
“We’re not able to comment right now,” Monzo co-founder Tom Blomfield told me when I asked for confirmation of the startup’s new funding and lead investor.
Noteworthy, Monzo wouldn’t be the first European fintech to receive backing from New York-headquartered Thrive Capital. The VC firm, founded by Josh Kushner, recently led a €30 million Series C round in German fintech Raisin, which offers pan-European savings accounts.
Monzo (previously Mondo) is building a digital-only bank, or “smart bank,” as Blomfield calls it, and last August was granted a U.K. banking licence “with restrictions” by the U.K. regulators FCA and PRA, as it prepares to launch a full current account later this year.
As it exists today, Monzo’s more than 100,000 users get access to a pre-paid MasterCard and accompanying iOS and Android app. It offers the ability to do things like track your spending in real time, view geolocation-marked transactions on a map, view spending by category and get a graphical timeline of your overall expenditure.
The startup has previously raised £12.8 million in funding, the majority of which came from early-stage London VC Passion Capital, in addition to an equity crowdfunding round. The most recent £4.8 million “bridge funding”, which was announced in October, valued Monzo at £50 million.
Noteworthy, Monzo was rumoured late last year to have turned down a substantial acquisition offer from an incumbent bank, which co-founder and CEO Tom Blomfield confirmed last week in an interview with TechCrunch.
Explaining the reason for declining the offer, he said: “It’s never just the money, the money comes with strings and they’re really, really onerous…,” citing legacy IT, legacy culture and legacy thinking. “It just stops you taking risks, fundamentally, stops you innovating, that’s the real problem”.
In addition, Blomfield told TechCrunch that, although you can never rule it out, selling early is the startup bank equivalent to a bailout plan: “It means you haven’t accomplished what you set out to do”.
The company’s pending (Series C?) funding shows that Blomfield and the rest of the Monzo team have a long way to go yet.