Monzo, the UK-based Startup, which has managed to create a mobile-first banking service, has gained £71 million ($93 million) in a funding round to streamline the hunting for the clients with a sad experience generated from the traditional banking service using.
Monzo and other similar startups like Revolt and Starling Bank continue to gain more popularity in the UK thanks to ease of use of the mobile apps without any additional fees and timely service provided. So, being founded in 2015, Monzo counts more than 400,000 customers and this number is constantly growing by 5 per cent a week.
The latest funding round is approximately four times the £ 19.5m increased in February – and doubles its valuation to £ 280m. The impressive growth rates make Monzo is in the spotlight of the USA including investments provided by venture capital firm Goodwater Capital and payments company Stripe.
By the way, there is still a problem. The popularity is not always resulted into profitability. So, Monzo announced £7.9m loss for the year to end-February and emphasized that each new client costs about 50 pounds. The deal is digital banks don’t provide a full-scale mortgage and consumer lending. But this is the traditional way how brick-and-mortar banks earn money along with service fee charging.
Moreover, the operating brick-and-mortar banks didn’t stay aside and made contributions into their own digital platform development. So, HSBS has become the pioneering bank which launched the new app allowing the customers to manage their account in multiple banks in one place.
In this light Monzo is striving to be ahead of the new regulation aimed at increased competition in the banking sector of the UK while opening the major player predominance and supporting small-scaled financial technology companies to fight for clients.
Tom Blomfield, Monzo chief executive, also stated that Monzo would attract new financing for hunting greater number of qualified employers to improve its product and extend its customers’ database which now is 470,000.
“We want to make it as easy as possible for people to manage and make the most of their money, to give people total visibility and control over all of their finances, and offer them their pick of the best products that the market has to offer. To help us achieve our ambition, we will continue to hire talented people, focus on building the best product, and bring Monzo to as many people as possible”.
The funding campaign also attracted investments from Crankstart Foundation, a charitable investment vehicle chaired by Michael Moritz, head of Sequoia Capital. Passion Capital, Thrive Capital and Orange Digital Ventures – the Monzo supporters in previous rounds – have kept their position as investors.