The UK’s unicorn club has welcomed its newest member – Monzo, the fintech known for its distinctive “hot coral” coloured bank cards. Accel Partners, General Catalyst and others funded the digital-only challenger bank’s $109m (€95.3m) series E round, pushing its valuation to $1.28bn.
Monzo has amassed more than one million customers in less than four years. Users have been attracted to its low-cost overseas withdrawals and feature-rich, user-friendly app. Although the start-up’s losses widened from £7.9m (€9m) to £33.1m last year, it is scaling at pace. Its large and fast-growing client base holds huge appeal for its backers.
One of the current obstacles for the bank is the small sums being deposited. On average, Monzo accounts hold just £150, as users currently see the service as secondary to their main banking service providers. Accel et al will be hoping for attitudes to change. Key to that will be the execution of a strategy to make Monzo a marketplace for everything from loans and investments to insurance and energy, and charging partner firms fees for customer sign-ups.
If it can fully implement that model, the unicorn status will be validated.