January 25, 2021

Monzo lands another £60m from new backers

Monzo has landed £60 million in funding from a host of new backers. These include Stripe and Deliveroo investor, Novator, as well as Kaiser and TED Global.

Existing investor, Goodwater, also joined the round. Monzo’s other investors, including Y Capital, Passion Capital, and Accel, already re-invested in the challenger bank earlier this year.

Monzo's co-founder Tom Blomfield

Monzo’s co-founder Tom Blomfield

The challenger claims to have some 4.8 million customers, and its latest funding still leaves it with its £1.2 billion valuation – a 40% drop on its value pre-pandemic.

Since COVID-19-induced lockdowns began, Monzo has raised £125 million. The funding consists of the two £60 million raises (one in June and one this month) and a £5 million top-up to its June round.

Looking beyond interchange fees

According to TechCrunch, Monzo boasts 60,000 business customers. That’s more than double the 25,000 it had in June.

It also has more than 100,000 customers across its paid-for current accounts. These include both Monzo Plus and Monzo Premium.

“[We] are now nearing five million customers, all while becoming the most switched to bank in the UK and the top-rated for overall service,” Monzo’s CEO, TS Anil, tells TechCrunch.

“This news demonstrates the confidence that both our customers and investors have in Monzo.”

Anil refers to the Ipsos MORI report, commissioned by the Competition and Markets Authority (CMA). It lists Monzo as the best UK bank in terms of overall quality of service – 2% higher than Starling.

A tough year

Shortly after the coronavirus lockdown began, co-founder Tom Blomfield decided to forgo his salary and top executives took a 25% pay cut. He placed 295 members of staff in the UK on a voluntary furlough scheme.

Monzo shut its Las Vegas office in April which saw 165 employees let go. Then in June, the challenger announced 125 redundancies in its UK offices. They accounted for roughly 8% of the start-up’s workforce.

It also reported losses of £115 million and a host of redundancies, Monzo has experienced a handful of top-level reshuffles in 2020.

Blomfield left the bank’s board in July just a month after news broke of him stepping back into a presidential role. Anil, then US CEO, stepped into the group CEO role following Blomfield’s move to president.

GBB, an aspiring UK challenger bank, landed Monzo’s co-founder, Paul Rippon, as its non-executive chair.

Monzo chief risk officer (CRO), Lisa Nowell, left the challenger last month – little over a year into the role. And it lost its legal head James Sullivan to fintech start-up Ziglu last month too.