$1.6 billion bank Monzo is finalizing a $68 million funding extension from a new Silicon Valley investor

  • Challenger bank Monzo is close to raising a second extension to its June funding round. 
  • Founded in 2015, Monzo will bring in new funding from crossover Silicon Valley fund Octahedron Capital. 
  • The £50 million ($68 million) round will likely close this week. 
  • Visit the Business section of Insider for more stories.

London-based challenger bank Monzo is in the final stages of closing an extension to its newest late-stage funding round. 

The fintech startup, founded in 2015, is set to bring in an additional £50 million ($68 million) in a Series G funding top up which will likely close this week.

Sky’s Mark Kleinman first reported news of the funding extension.

Insider can reveal the additional cash comes from existing investors in the company plus one new backer: San Francisco-based Octahedron Capital. 

Octahedron Capital did not immediately respond to a request for comment.

Octahedron is not an established player in the VC space and was founded in April 2020. It recently invested into San Francisco-based AI startup Databricks and Indian enterprise platform Udaan.

There is a connection between Monzo and its new investor. Octahedron Capital was founded by Ram Parameswaran, husband of Y Combinator Continuity partner Anu Hariharan, who invested in Monzo’s Series F round in June 2019.

Monzo is part of a new generation of banking and money management apps in Europe, alongside Revolut, Starling Bank, and N26. It has won plaudits for its customer service, easy-to-use app, and money management features. More than 4 million customers bank with Monzo, and its “hot coral” payment cards are a common sight around the UK.

The company has experienced some change during the pandemic, laying off around 80 staff last June. Cofounder and former CEO Tom Blomfield stepped away from the company in January, citing his mental health. He has been replaced as CEO by former Visa executive TS Anil, who originally joined as US CEO in February 2020.

According to its 2020 annual report, the company lost £115 million ($160 million) for its fiscal 2020, down from £47.2 million ($65 million) in 2019. It reported a revenue increase from £19.2 million ($26.3 million) in 2019 to £67.2 million ($92.2 million).

Monzo first announced its Series G funding last June with $76 million. That was subsequently topped up in an initial extension in December 2020. 

The new extension is at the same £1.25 billion ($1.6 billion) valuation, and takes Monzo to £175 million ($240 million) in total funding since the coronavirus pandemic began.

Monzo’s Series G was initially backed by new investors Reference Capital and Vanderbilt University. The December top up — a further £60 million ($82 million) — was led by new investors Novator (a backer of Deliveroo and Stripe), Kaiser, and TED Global. They join existing backers such as Y Combinator, General Catalyst, Accel, Stripe, Thrive Capital, Orange Ventures, Goodwater Capital, and Passion Capital.

Banking

Read the latest banking news and featured articles:
– Banking Industry Trends
– Future of Banking Technology
– Mobile Banking Market
– Banking as a Service Explained
– Digital Banking
– Open Banking & Bank APIs
– Alternative Lending & Nonbanks
– US Neobank Market

Source: Read Full Article