The fintech has reported robust growth since the start of the year.

British digital bank Monzo has turned around its fortunes this year after a surge in the number of new customers took its user base to 5 million and doubled its revenues. The bank has pivoted from a situation in 2020 when its auditors expressed doubts over its ability to continue operating as a going concern. The Financial Times reported Wednesday that Monzo is in the midst of closing a $500 million funding round at a valuation of $4.5 billion – a far cry from February, when it was valued at £1.25 billion.

“This round comes off the back of a fantastic year for Monzo,” said chief executive TS Anil to FT. “We’ve seen record revenues, launched new products and tools and continued to top the charts for our services. We’ve hired some incredible talent.”

The headcount at the bank has risen 60% since January 2021 to 2,100.

Monzo funding round

The funding was led by Abu Dhabi Growth Fund, with participation from Coatue and Alpha Wave Ventures, Accel and Goodwater. The first part of round, amounting $475 million, has been closed, with a second close within two weeks that will bring the total to more than $500 million.

“This investment means we’ll grow further and faster as we continue on our journey to reinvent banking, and become the one app that sits at the centre of our customers’ financial lives,” added TS Anil.

The neobank recently launched a buy-now-pay-later (BNPL) offering and is mulling a potential introduction of cryptocurrencies.

The funding round comes despite Monzo suffering certain setbacks earlier this year. It said in July it was under investigation by the Financial Conduct Authority over likely violations of anti-money laundering laws.

In the US, in October, it was forced to withdraw its application for a banking licence after being told it was unlikely to be approved.

At its current valuation of $4.5 billion, Monzo is Europe’s third most valuable neobank, behind Revolut and N26.

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