Monzo Digital Bank Raises $ 500 Million at $ 4.5 Billion Valuation
UK challenger bank Monzo raises more than $ 500million (£ 377million) at a valuation of $ 4.5bn (£ 3.4bn) as it prepares to dive deeper into cryptocurrency trading and evolving your buy now, pay later (BNPL) product.
The first part of the funding closed with $ 480m (£ 360m), Monzo said on his website’s community forum. The rest of the cycle should be completed in the coming weeks.
Abu Dhabi Growth Fund led the round, with participation from new investors Coatue Management and Alpha Wave Ventures and existing backers Accel and Goodwater.
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“This investment means we will continue to grow faster as we continue on our path to reinvent banking and become the one app that sits at the center of our clients’ financial lives,” said Monzo CEO TS Anil, at the Financial Times.
The valuation of the company has increased by 300% since the start of 2021, driven by an increase in new client registrations which have doubled its revenues.
“We achieved record revenues, launched new products and tools, and continued to top the charts for our services. We have hired incredible talent, ”said Anil.
Read more: Report: Monzo launches into BNPL
Monzo Flex, its BNPL product, offers a payment in three installments at 0% interest, or a payment in six and 12 installments at 19% APR (variable).
According to a PYMNTS study, around 61% of small and medium-sized enterprises (SMEs) indicated that customers would turn to traders who offer BNPL options and that BNPL concludes sales that would not otherwise take place.
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Even at $ 4.5 billion, the digital banking valuation lags behind European rivals like Revolut, valued at $ 33 billion and N26 at $ 9 billion. Monzo surpasses rival Sterling Bank’s $ 1.5 billion.