UK-based challenger bank Monzo is on the brink of closing a $50m funding round, marking the third raise since the pandemic began, according to reports.
The British digital banking startup is reportedly about to finalise a deal with existing investors as well as the new backer Octahedron Capital, people familiar with matter told Sifted.
The deal is yet not finalised, but if it would go through, it would mark Monzo’s third raise since the coronavirus crisis began.
However, both those rounds came after Monzo’s valuation had dropped by 40% from 2019 when it raised a £113m funding round at a £2bn valuation.
The news about the potential new deal comes after Monzo founder Tom Blomfield announced in January that he would leave the company, citing mental health issues.
Since the launch of the business, Blomfield had served as the company’s CEO until May 2020, when he moved to the role of president.
The change in positions was intended to enable Blomfield to focus on the long-term vision of the bank and work he enjoys more.
Blomfield’s exit has sparked a push for FinTech companies to recognise the mental health issues that comes with working in the sector.
Another setback for the challenger bank came in July when Monzo reported that it has doubled its losses. The losses had stood at £47.1m in 2019 and had jumped to £113.8m in 2020.
The news came after it had made many of its employees redundant and fought off persistent rumours about its impending collapse.
Despite these setbacks, the last year has also had some good news for the neobank.
A number of British regulators named Monzo and rival Starling as the two leaders in customer service among the country’s personal account providers in January.
In October, Monzo also launched a new premium account and had previously re-launched Monzo Plus, which costs £5 per month and comes without the insurance benefits and the metal card enjoyed by Premium customers.
An earlier version of Monzo Plus had been scrapped in September 2019, just months after it was first unveiled in April the same year after facing a deluge of customer complaints.
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