Monzo, a leading fintech company in the UK, is finalizing an expanded fundraising round with one of the world’s most renowned technology investors. According to sources, Monzo has reached an agreement with Hedosophia, an early investor in companies such as Airbnb and Uber, to become a shareholder in the bank.
It is expected that Monzo will announce this week the participation of Hedosophia and Singapore’s Government Investment Corporation (GIC) in a fundraising round of nearly £500m. This round is larger than initially anticipated and is one of the biggest ever achieved by a British tech company.
Insiders have revealed that GIC will invest over £50m, while Hedosophia will commit tens of millions of pounds. Founded by Ian Osborne, an early-growth investor, Hedosophia has backed some of the biggest names in the tech industry over the past 15 years, including Wise and Marshmallow.
This expanded fundraising round is expected to provide Monzo with enough capital for its future plans, including a potential public listing in the next few years. The digital bank, which currently has millions of customers in the UK, recently reached a valuation of over £4bn after concluding the initial phase of its funding round.
Monzo was founded in 2015 and has since become profitable, expanding its services to include investments and instant access savings accounts. It now ranks as the seventh-largest bank in Britain in terms of customer base. The latest funding round was led by Capital G, the independent growth fund of Alphabet, Google’s parent company.
Monzo is part of a new generation of banks that have emerged in the UK since the last financial crisis, gaining a significant share of the retail banking market. Its rivals include Starling Bank, which recently appointed a permanent CEO to replace its founder, Anne Boden. Another major competitor, Revolut, is yet to receive a UK banking license despite ongoing talks with regulators.
Monzo has made a remarkable recovery from a challenging period two years ago when it faced an investigation by the City watchdog for possible breaches of anti-money laundering and financial crime regulations. While it has recorded losses in the past, as is typical for start-ups, Monzo is expected to achieve profitability this year – a significant milestone for a standalone digital bank.
In pursuit of its international expansion strategy, Monzo recently restructured its corporate setup, establishing Monzo Bank Holding Group to avoid facing strict capital requirements from British regulators as it expands into new markets. Monzo’s current investors include Tencent, Passion Capital, Accel, and General Catalyst. The company is led by chief executive TS Anil and chaired by Gary Hoffman, a prominent figure in the British banking industry.
Monzo declined to comment on the latest developments.