British digital bank Monzo has raised $500m in a funding round that gives it a valuation of $4.5bn – a 200% increase on its valuation at the start of the year.
The Abu Dhabi Growth Fund led the funding round, while Alpha Wave Ventures and Coatue backed the fintech for the first time. Existing investors such as Goodwater, Accel and General Catalyst also provided fresh capital.
The funding round follows a turbulent two years for the challenger bank. The pandemic saw it halt plans to break into the US market, while its founder Tom Blomfield stepped down in spring.
But the funding round could mark a turning point for Monzo, with the company claiming it doubled revenues this year and has reached 300,000 paid accounts.
Around 25% of revenue came from products launched during the pandemic, the company said, which include its business and premium accounts.
The London-headquartered fintech is now adding about 100,000 customers each month.
“This round comes off the back of a fantastic year for Monzo,” said Monzo CEO TS Anil. “We’ve seen record revenues, launched new products and tools and continued to top the charts for our services.”
In February Monzo was valued at £1.25bn, down 40% on its previous valuation. Its $4.5bn valuation makes Monzo Europe’s third most valuable neobank.
However, it remains some distance behind UK rival Revolut, which achieved a $33bn valuation in July. But it does mean Monzo has surpassed the $1.5bn valuation of profitable digital bank and rival Starling.
Monzo, which was founded in 2015 as a mobile-only bank, is exploring new products such as buy-now-pay-later services as it looks to take on the likes of Klarna. It is also considering cryptocurrency products and a retail investing platform, according to the Financial Times.
The latest round brings Monzo’s total funding to over £900m. The company is reportedly considering a public listing in the near future.