Digital challenger bank Monzo has landed a new multimillion pound round of funding from fresh investors valuing it at £65m.
The startup, which is seeking to disrupt traditional banking with online-only services, will combine the investment with a fresh round of crowdfunding following huge demand from private investors last year, totaling £22m.
The round was led by New York's Thrive Capital, a backer of Instagram, Twitch and Spotify. Orange Digital Ventures, the venture arm of the French telco is also participating – Monzo's first corporate venture capital investor- along with Eileen Burbidge's Passion Capital, an early backer of the startup.
Monzo will embark on a second crowdfunding campaign via Crowdcube to raise £2.5m, a year after smashing a £1m target in 96 seconds with huge demand, an equity crowdfunding record.
The fresh cash will go towards fulfilling its capital requirements for becoming a full bank. It gained a banking license last summer and plans to roll out its first product, a current account, are underway.
It will also go on expanding the business and the bank plans to double its current staff of 85 over the next year, chief executive Tom Blomfield told City A.M.. It has just signed a lease on a property on City Road four times the size of its current office.
"Banks are not meeting the needs of the modern consumer," said Thrive Capital principle Miles Grimshaw. "Consumers are used to the ease and convenience of offerings like Amazon, and they expect the same from their bank. Building a modern banking experience from front to back is an incredible challenge and we haven't met a better team [than Monzo] to take it on."
Pre-registration for the crowdfunding will take place between 28 February and 14 March followed by a ballot to ensure fair access to wannabe investors, many of whom are customers.
"The response to the crowdfunding last year was incredible, we were blown away by the demand from investors," said Blomfield, adding that up to 5,000 individuals are expected to invest.
The bank boasts 100,000 customers who have spent £100m using its pre-paid card and is one of a number of digital-challenger banks hoping to give high-street banks a run for their money.