Digital challenger bank Monzo raises £71m as Micheal Moritz, Stripe and Goodwater Capital boost valuation

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Monzo has nearly half a million customers (Source: PR)

Digital challenger bank Monzo has raised millions more investment in its biggest funding round to date, more than doubling its valuation.

The startup has landed £71m from several new and existing investors which values it at £280m amid a funding boom for fintech in the UK.

Renowned Silicon Valley investor Michael Moritz has backed Monzo via his charitable trusts including the Crankstart Foundation while US fintech firm Stripe and US venture firm Goodwater Capital have also become new backers.

Read more: Now you can use Monzo with Android Pay

Passion Capital, Thrive Capital and Orange Digital Ventures have ploughed more cash into the startup which raised £22m back in February.

Monzo will also offer a fresh round of crowdfunding for its existing 8,000 backers with a target of £1.5m and a further, larger round for new private investors is planned for next year.

“This is an incredible endorsement of our strategy so far, and sets us up to continue the growth we’ve seen this year into 2018," said co-founder and chief executive Tom Blomfield.

"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. We’re grateful and flattered to be joined by such high-calibre investors, who have unparalleled experience in growing and scaling globally-successful businesses.”

Read more: Monzo's introducing new ATM fees: Here's how much you'll pay

The startup is closing in on half a million customers with more than 20,000 now signed up to its current account. It aims to get all switched over from the pre-paid card which originally launched in 2015 by the end of the year and start offering full accounts to new customers from next year.

"Monzo's growth in the UK has been incredible, and the fact that it's been driven by word of mouth makes it even more exciting," said Goddwater Capital managing partner Chi-Hua Chien.

"Customers love Monzo because the company treats them right, solves their problems, and does so with total transparency. These values express themselves powerfully through Monzo's leadership team, world-class product and innovative services."