It might have been beaten to the punch in becoming the UKs first digital bank to be granted a banking licence (that honour goes to Atom), but Monzo now looks set to get ‘one-up’ on its rivals as it becomes the first $1bn mobile-first bank.
The London based bank recently organised a new round of funding, securing $150 from investors that include Silicon Valley’s Accel Partners, an early investor in Wong, and recent investments from singer Tom Odell and the Instagram co-founder Kevin Systrom.
This new investment, set to be announced later this year, will make Monzo the first challenger bank to reach $1bn valuation, some four times the value placed on it back in 2017.
Launched in 2016, Monzo’s initial appeal was a striking pink prepay travel card offering fee-free currency transactions world-wide. It lost the race to become the first digital bank to offer current accounts to competitor Starling, and later imposed limits on foreign ATM withdrawals. It seems however, that did little to dampen its appeal. Currently the bank has close to 900,000 customers with hopes to pass the 1m mark this year.
Monzo along with Atom, and Starling (our top digital bank pick for spending aboard) is one of a growing number of fintech disrupters offering digital services to lure smartphone users away from the traditional highstreet banks. These digital offerings appeal most to those under 40, the late Gen X, Millennial, and early Gen Z, generations.
Despite the growing popularity of mobile banks, and the huge valuations, digital challengers are yet to turn a profit. The closest being Revelut, which helped by its 1.5m customers became the first to break even early this year.