UK Digital Bank Monzo’s Valuation Doubled To $2.5 Billion – Market News Store

UK Digital Bank Monzo’s Valuation Doubled To $2.5 Billion

UK’s Internet-based bank Monzo got over $144 million in another funding round led by Y Combinator. The latter is a startup accelerator that helped companies like Stripe and Airbnb. It made an investment in Monzo via Continuity Fund. The company is currently valued at $2.5 billion, up from its last round. The fin-tech company also has become popular due to its app-online accounts and bright bank cards. Tristan Thomas of Monzo stated that this signified its progress. Bank’s customer base has doubled to over 2 million as well. It has capital, however, the fresh flow will be used to expand in USA and support growth. LA and other US cities are currently on its radar.

Investors during this round include Stripe, Accel and Orange. The company stands among those new banks which are jumping on the new trend among customers about handling finances via smartphones. Competitors include Rovolut and Chime. Anu Hariharan of Continuity Fund stated that current banking systems were archaic and un-adaptable. Y Combinator was led to invest because of the speed with which it hit 2 million users in UK, which made it seem similar to social media networks. Monzo holds community events and maintains a forum where customers can post questions and feedback about its service.

However, it remains to be seen how these banks make a profit. Monzo is now earning £4 for every customer who signs up compared to the £15 loss it made last year per customer. Monzo’s Thomas stated that they wanted to earn money and turn sustainable for years to come.

Monzo is pitching for a marketplace model where other products like savings are possible. Monzo’s rival Starling is also going down this road. Hariharan stated that this was among the revenue streams banks couldn’t have thought before. With this space still new and early, there were many fundamental levers. Have enough customers and you can do quite some business. Investors are entering fin-tech more and more, with UK being a favorite for VCs. The sector saw an inflow of $36.6 billion, with about $3.3 billion going to British firms.

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