Monzo Said to be Planning £20mln Crowdfunding

Monzo Said to be Planning £20mln Crowdfunding

Monzo Said to be Planning £20mln Crowdfunding 1200 900 AltReturns
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Monzo is reportedly planning to raise £20mln from customers through an equity crowdfunding round ahead of a traditional fundraising that would value the online bank at more than US$1bn.

The London-based bank, whose bright orange debit cards and smartphone app have grown in popularity among millennials, is expected to turn to Exeter-based platform Crowdcube to facilitate what will be one of the UK’s largest crowdfunding round to date, according to City AM.

Monzo eyes the ‘Unicorn’ status

Monzo used Crowdcube for its first crowdfunding in 2016 when it raised £1mln in 96 seconds. The bank has raised about £4mln from crowdfunding investors to date.

monzo cardVenture capital funds and other investors have also put in more than US£100mln into the company.

The latest crowdfunding round comes as Monzo seeks to raise about US$150mln of funding from investors, including Silicon Valley’s Accel Partners, which was an early investor in Wonga.

That fundraising is expected to value Monzo at up to US$1.5bn, giving the bank so-called “unicorn” status alongside privately held technology companies such as Deliveroo and Skyscanner valued at US$1bn or more. The valuation is about four times the £280mln value placed on the bank when it last raised money in November 2017.

Monzo is among a growing number of financial technology companies that are considered a threat to traditional retail banks that have been late to bringing their online banking up to speed.

Lloyds Banking Group PLC (LON:LLOY), Barclays PLC (LON:BARC), Royal Bank of Scotland and HSBCHoldings PLC (LON:HSBC) have been playing catch up by ploughing money into their digital services to prevent customers from leaving to online-only banks like Monzo.

Whereas most banking apps take up to three days to show how much customers have spent on their cards, Monzo’s smartphone app shows purchases instantly. The app gives users a breakdown of spending over the month. Monzo also offers interest-free overseas purchases and free overseas withdrawals of up to £200 per month.

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