App-based banking startup Monzo is joining the Unicorn club on the back of a new £85 million funding round that values the three-year old banking newcomer at over £1 billion
The £85 million funding round was led by General Catalyst, alongside Accel and existing investors.
It comes shortly after Monzo reached the one million customer mark for its app-baed banking service. The switchover to full current accounts commenced at the start of the year, with 95% of the bank's existing card-only customers making the move.
Monzo has been on a tear ever since, rolling out new products like joint accounts and accounts for 16 year olds, alongside the usual fintechy money management and smart budgeting app upgrades. It is also bringing an ethical dimension to its mission, making it easier for people without a fixed address to open an account and introducing a feature which enables problem gamblers to block access to online betting Websites.
The company now claims to own 15% of all new current accounts opened each month in the UK. It is setting its sights on being once of the top six UK banks within next two years and is planning to double its workforce to 900 employees within the next 12 months.
However, the strong customer numbers have yet to translate to profits, with the startup last year posting a £33 million pre-tax loss on revenues of just £1.8 million.
Monzo fans and investors are taking the long view. In 2016, Monzo raised a record-beating £1 million in 96 seconds through crowdfunding, and more recently raised £2.5 million with more than £12 million pledged. The company says it will be returning to Crowdcube later this year for a "much larger" round, estimated to be somewhere in the ballpark of £20 million.