Once again, challenger bank Monzo has received a grand show of confidence, raking in a significant £71 million its latest funding round.
Among the group that contributed to the round are Stripe, with venture capitalist Sir Michael Moritz arriving among new backers of the company, accelerating its progress toward launching current accounts.
Faithful supporters from previous Monzo funding rounds also returned to help, Orange Digital Ventures, Passion Capital and Thrive Capital all responded to the challenger bank’s latest call.
While continuing on its current account project, Monzo is under pressure from mounting losses due to its pre-paid card service. This problem has been intensified by the influx of customer joining Monzo.
By the summer of 2017, this problem had already been responsible for the accumulation of £7.9 million in losses, and the challenger bank’s current account plan is set to stem the he damaging flow.
Work on the Monzo current account is well underway, with numerous accounts being trialled by staff members in the run up to a widespread release, with the progress now braced and fortified by the substantial funding round.
Tom Blomfield, Monzo CEO, speaking to TechCrunch, said: “Pre-paid is just a very difficult business to create something sustainable, but it is a great way to start… We’ll start to roll out some revenue-generating products in the next few weeks and months, particularly lending and third-party partnerships.”
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The money gained in the recent funding round will be spent on readying and supporting customers in the transition to current accounts, as well as increasing its staff base to support and manage the uptake of its new offering.
The bank’s name has rapidly become widely familiar, but it must be remembered that it burst onto the banking scene in full force earlier this year only. In April 2017, Monzo gained its full license, having functioned on a restricted one for the previous two years, a time frame that puts the banks meteoric progress into perspective.
