Monzo, part of a new movement for digital only or ‘challenger’ banks in the U.K. that aim to re-define the current account, is close to acquiring new Series C funding, which could be announced as early as this week.
Based on reports from multiple sources, U.S.-based Thrive Capital will be leading the round. While the scoop on the exact amount of the funding is yet inconclusive, sources say it is definitely going to be above £20 million, with a second equity crowdfunding campaign also in the pipeline.
“We’re not able to comment right now,” When asked for further details of the new funding and the lead investor, Monzo co-founder Tom Blomfield declined to comment at the present moment.
It is interesting to note that Monzo wouldn’t be the first European fintech firm to rake in funding from New York-based 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 claiming to build a digital-only bank, or “smart bank,” as Blomfield previously put it, being granted a U.K. banking license “with restrictions” by the U.K. regulators FCA and PRA last August. This year, it is gearing up to launch a full current account.
As per its current operations, Monzo’s 100,000 plus users can access 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 also already raised £12.8 million in funding, most of which came from early-stage London VC Passion Capital, as well as an equity crowdfunding round. The most recent £4.8 million “bridge funding”, which was announced in October, valued Monzo at £50 million.
Interestingly enough, towards the end of lat year, Monzo was rumored to have turned down a substantial acquisition offer from an incumbent bank, with co-founder and CEO Tom Blomfield confirming this last week in an interview with TechCrunch.
Commenting on 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.
Blomfield also told TechCrunch that, although it can never be ruled 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 speaks volumes of all that Blomfield and the rest of the Monzo team have in mind for the future of the firm.
