Monzo, the fintech that has become one of Britain’s biggest consumer banking groups, is this weekend putting the finishing touches on an expanded fundraising involving one of the world’s best-known technology investors.
Sky News has learned that Monzo has agreed with Hedosophia, an early backer of Airbnb and Uber, to become a shareholder in the bank.
City sources said on Sunday that Monzo could announce as soon as this week that Hedosophia and Singapore’s Government Investment Corporation (GIC) were participating in a global fundraising worth around £500 million.
The larger-than-expected round makes it one of the largest ever raised by a British technology company.
One source said GIC was investing more than £50 million, with Hedosophia also committing tens of millions of pounds.
Hedosophia, which declined to comment, is an early growth investor founded by Ian Osborne, which has backed some of the biggest names in technology in the world over the past 15 years.
Among the British technology companies supported are Wise, the London-listed money transfer company, and Marshmallow, the insurance group.
Monzo’s expanded fundraising will likely mean it will not need any additional capital if it decides, as expected, to go public in the coming years.
The digital bank, which has millions of customers in Britain, recently secured a valuation in excess of £4 billion after completing the initial phase of its funding round.
Founded in 2015, it is now profitable and has diversified into investments and instant access savings accounts.
It is currently the seventh largest bank in Great Britain by number of customers.
The new fundraising was led by Capital G, an independent growth fund from Alphabet, Google’s parent company.
The company is part of a new generation of banks that has emerged since the last financial crisis and has begun to amass a significant share of the UK retail banking market.
Rivals include Starling Bank, which recently appointed a permanent chief executive to replace its founder, Anne Boden.
Revolut, which was valued at $33 billion (£26.5 billion) in a 2021 funding round, has yet to receive a UK banking license despite more than a year of negotiations with regulators.
Monzo recovered spectacularly from a difficult period two years ago, when it emerged that the city’s watchdog was investigating it for potential violations of anti-money laundering and financial crime rules.
Historically it has been loss-making, as with most start-ups, reporting a loss of £116m in the year to the end of February, but is expected to be profitable this year – an important milestone for a digital bank autonomous.
Monzo recently renewed its corporate structure as it pursues an international expansion strategy that will serve as a prelude to a stock exchange listing.
Monzo Bank Holding Group was created to prevent the company from facing punitive capital treatment from British regulators as it launches into new overseas markets.
Monzo’s existing investors include Chinese group Tencent, Passion Capital, Accel and General Catalyst.
Monzo is run by TS Anil, its chief executive, and chaired by Gary Hoffman, one of Britain’s most prominent banking executives.
On Sunday, Monzo declined to comment.
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