Uk’s digital bank Monzo is reportedly holding discussions in order to potentially sell a new £300 million stake.
As first reported by Sky News, the share sale, which may value Monzo at over £3.5 billion, is probably the final such transaction before it goes after a stock market flotation.
At present, Monzo is in talks regarding a £300M+ fundraising deal that may result in the business becoming the most highly-valued virtual bank in the UK.
Sky News also revealed that Monzo, which was established back in 2015 and currently claims 8.5 million customers, is in extensive talks with various blue-chip investment funds regarding a share sale set to value the firm at £3.5B+.
The discussions are not yet finalized, and the identity of new backers has not been confirmed by the firm’s board, sources familiar with the matter revealed on Thursday.
The Fintech firm is expected to confirm all the pertinent details of the stake sale by the end of 2023.
Sources also stated the capital raise could be carried out at a premium to the £3.5 billion at which it acquired funding from Abu Dhabi Growth Fund back in 2021.
That could be a rare occurrence in tech funding markets, which have forced many firms to secure capital at considerably lower valuations.
Monzo competitors include Starling Bank, which is presently looking for a new permanent CEO.
Revolut, which had been valued at $33 billion in a round back in 2021, has not been able to acquire a UK banking license, even though the firm engaged in several months of discussions with regulatory authorities.
Notably, Monzo has been able to recover from a challenging period a couple of years back when it was revealed that the City regulator had been investigating possible violations of AML and financial crime regulations.
While Monzo is still a loss-making business, reporting a loss of £116 million in the year to the close this last February, it is set to become profitable in 2023 – a notable achievement for an independent virtual bank.
Momzo’s most recent round is probably going to be the last such raise prior to the firm introducing an initial public offering, in which it may sell off shares to the public.
Current Monzo backers reportedly include Tencent, Passion Capital, Accel, and General Catalyst.