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Digital bank Monzo has cemented its position as one of the most highly rated financial technology companies by doubling its value to over £2bn after its latest round of funding.
Coming hot on the heels of its last round of fundraising eight months ago, Monzo has seen a further investment of £113m led by the Silicon Valley start-up accelerator, Y Combinator Continuity Fund. Y Combinator Continuity has already backed other brands, including Airbnb, Dropbox and Reddit.
Monzo is one of the so-called ‘challenger’ banks – new arrivals in the marketplace who are looking to challenge the dominance of the big high street players, such as Barclays, HSBC and Lloyds. Monzo is a fast-growing brand among the Millennial generation of 20 to 35-year-olds, who are attracted by its range of cutting-edge digital banking apps and services.
From its original starting point in prepaid credit cards, Monzo has grown to be one of the leading tech ‘unicorns’ – a US term used to describe new tech companies that are worth more than $1bn. However, in line with the other companies in this bracket, Monzo has still not made any profit, with a loss last year of some £33m.
Despite these losses, there is no sign that its financial position worries its core customers, who love its blend of innovative services that are controlled by a single smartphone app. This includes being able to easily split bills with friends and even set monthly limits for various types of spending.
New innovations, such as instant alerts direct to your mobile phone and the ability to sign up to a new account instantly, sit alongside other crowd-pleasing benefits such as fee-free use while abroad. We also recently reported that Monzo has scored well for bank service performance – with 95% of accounts being opened on the same day.
There’s little doubt that Monzo and other digitally based challenger banks entering into the UK marketplace is forcing the old guard to innovate quickly to keep pace – something that can only lead to an upswing in the range and quality of banking services for their increasingly tech-savvy customers.
To see how Monzo compares, why not take a look at our bank accounts comparison chart.
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