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The alternative banking app Monzo has raised a massive £85 million in Series E funding. The fast-growing challenger bank hit the pre-money valuation of £1 billion, making Monzo the UK's latest fintech unicorn.
The funding round was led by U.S. venture capital firm General Catalyst and Accel Partners. Previous investors Passion Capital, Goodwater, Thrive Capital, Orange Digital Ventures, and Stripe also contributed.
Monzo recently switched from pre-paid cards to current accounts, and now boasts over a million customers. As a result, the bank has gone from strength to strength and it now accounts for 15% of all new UK bank accounts opened each month.
Users can now own a slice of Monzo
Monzo also raised £71 million in an equity round from Goodwater Capital a year ago. Now the bank is planning on launching a crowdfunding round of £20 million later this year.
Chief executive Tom Blomfeld said "it’s incredible that more than one million people are now using Monzo." He added that this serves as a "testament to all the hard work that’s gone into building the company over the last three-and-a-half years."
However, Blomfield told the Evening Standard that “it’s dangerous to see investment as an achievement." He added "you end up optimising for ever bigger investment rounds which is not the goal – it’s to build a product that helps people and they genuinely love.”
According to Blomfield, Monzo were more excited about "hitting one million customers" than unicorn status. To Blomfield, that was a good sign that "a million people were using this product that we created.”
UK is the place to be for tech unicorns
Monzo is not alone as a fast-growing tech unicorn in the UK, which currently houses 15 companies with a valuation of £1 billion or more. New research released last week indicates that the UK has created 60 unicorn startups since 1990.
The UK currently houses 15 unicorns, making the country the unofficial unicorn capital of Europe. Monzo sits beside recent unicorn rival Revolut, which valued at $1.7 billion post-money after raising $250m in Series C funding.
Looking to the future, Blomfield told TechCrunch that the biggest challenge over the next year will be increasing revenue. At just three-years-old, however, Monzo seems to be well on its way to revolutionising fintech banking.
Interested in fintech? Listen to everything you need to know in our podcast with fintech expert Ying Panagiotou