The digital bank, Monzo recently confirmed that it has secured $500 million in fresh funding to expand its operations. Some of the world’s leading investors, including Abu Dhabi Growth Fund, Coatue and Alpha Wave Ventures participated in the latest funding round.
With the $500 million funding, Monzo received a valuation of $4.5 billion, which makes it one of the most valuable online banks in the world. Monzo witnessed exponential growth since the start of 2020 amid a jump in the adoption of digital tools in global payments.
Despite the recent surge in adoption, digital banks around the world are struggling with profits. One of the exceptions is Starling Bank. The online bank posted strong growth in profits during 2021.
Through the recent investment, Monzo is planning to develop new products in an effort to meet the evolving demand. In a statement TS Anil, the CEO of Monzo, highlighted the company’s latest growth in revenue and the hiring of incredible talent from different parts of the world.
"This round comes off the back of a fantastic year for Monzo. We’ve seen record revenues, launched new products and tools, and continued to top the charts for our services. We’ve hired some incredible talent. This investment means we’ll grow further and faster as we continue on our journey to reinvent banking and become the one app that sits at the center of our customers’ financial lives,” Anil said.
Challenges
In 2020, Monzo faced different challenges including a valuation cut. Despite the reason that the overall revenue surged in the last few months, the digital bank posted a loss in its annual report for 2020-2021.
Global investors are pouring money into innovative companies working in the financial technology sector. Earlier this year, fintech company Revolut raised $800 million in a funding round led by SoftBank's Vision Fund and Tiger Global Management.
