UK neobank Monzo is seeking fresh funding at a reported 40% discount on its previous valuation, according to the Financial Times.
The bank is close to agreeing a deal that will value it at around £1.25bn, compared with the more than £2bn valuation secured at its most recent funding round last June, says the paper, citing "several people familiar with the negotiations".
The Covid-19 pandemic is forcing loss-making tech companies to adjust their valuation to attract scarce funding from more cautious investors.
Monzo has already furloughed some 295 staff, closed a Las Vegas support office with the loss of 165 employees and CEO Tom Blomfield is forgoing his salary for a year as the digital bank looks to weather the Covid-19 storm
The FT reports that Monzo plans to raise between £70m and £80m to see it through the coronavirus disruption. This would secure its cash position into the second half of 2021 when it will have moved closer to profitability.
The deal is expected to close within the next month.