Monzo Raises $93 Million in Latest Fundraising Round
British mobile-only bank Monzo Bank Ltd. stated on Tuesday that this year has been incredible as it just raised its largest fundraising round to date, doubling its value within ten months.
The London-based startup firm said that it has secured an investment worth £71 million ($93 million) from a number of new and existing investors, nearly four times bigger than the £19.5 million it landed in February.
The latest funding round has lifted the company’s value to £280 million and it now has over 20,000 current account holders.
Monzo also stated that it has reserved funds worth £1.5 million for its existing crowd investors if they ever decide to boost their investment amounts. The digital bank currently has more than 8,000 crowd funding investors.
In addition, the challenger firm is planning on providing a larger round for new private investors by next year.
Monzo intends on using the latest funding to increase its workforce, step up its product and expand its user base, which is now at 470,000.
It would also use the injected capital to help it achieve contribution margin positive by the first half of 2018, meaning that each of its customer will have more revenue than they cost to service.
Monzo’s progress has not all been smooth sailing, given that it has reported a pretax loss of £7.9 million in the end of February, saying that each new user costs about £50.
This also indicates that Britain’s new app-only banks are still facing challenges and that digital banks have yet develop into a full-scale mortgage and consumer lending, just like the way traditional firms do to make money alongside charging costs for their services.
Monzo’s chief executive Tom Blomfield said that they will keep on hiring talented employees, focus on creating the best product, and bring the company to as many people as possible.
The company is also aspiring to become a lucrative business by the end of 2018 or early 2019.
Monzo, which got its full banking license in April, is currently working on rolling out present accounts. It is aiming to get all accounts swapped from the prepaid card and start offering full accounts to new customers by next year.
It is also planning on establishing a marketplace where other firms can provide their services to users.
The bank has also reported that it grown its customer base from less than 100,000 people to almost 500,000.
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