App-only bank Monzo raises £85m after attracting a million UK users

Ben Heathcote

In App Deals. October 31, 2018

Monzo, the fast-growing digital bank which recently surpassed one million users in the UK, has raised £85 million in Series E funding. The round was led by US venture capital firm General Catalyst, alongside Accel and existing investors.

The latest fundraising values the fintech startup at approximately $1.2 billion, making it the UK’s latest ‘unicorn’, a technology company valued at more than $1 billion.

Monzo has rolled out a number of new features over the last year, including joint accounts, accounts for 16-year-olds and bill splitting functionality. At the beginning of this year, the company asked all its customers to upgrade to full current accounts, and claims that almost 95% of its users did.

The fresh injection of funding will allow the challenger bank to reach more people across and the UK and continue to build new features. Co-founder and CEO Tom Blomfield said the startup’s 450-strong workforce could double to 900 over the next year.

Monzo is also planning to launch a £25 million crowdfunding campaign later this year which will be open exclusively to its customers. It follows a successful crowdfunding round in 2016, which saw the startup raise a record £1 million in 96 seconds, and a £2.5 million raise last year.

Rival challenger bank Revolut announced in July – a month earlier than Monzo – that it had hit the milestone of one million UK users. Three months earlier the startup closed a $250 million funding round at a $1.7 billion valuation and outlined plans to target 100 million users over the next five years.