The Financial Times has reported that the challenger bank could finalise a deal within the next two weeks to secure up to £350 million, from a combination of new and existing investors, according to anonymous sources “familiar with the matter.”

Prior to the funding round, the fintech was valued at approximately £3.6 billion, and after the funding round is due to be valued at around £4 billion.

Alphabet's investment arm, CapitalG, is poised to lead the funding round, with contributions expected from investors such as China's Tencent and the US-based fintech investor, Ribbit Capital. HongShan, the substantial Chinese venture capital firm that separated from Sequoia Capital last year, is also rumoured to participate in the financing, along with other investors, sources indicated.

In 2021, Monzo successfully raised capital, achieving a valuation of approximately £3.5 billion, with support from investors including Tencent, the Abu Dhabi Growth Fund, Coatue, and Accel.

An increase in Monzo’s valuation will signify a more favourable environment for fintech startups after a phase of instability due to escalating interest rates and heightened regulatory oversight. In recent years, investors have become cautious about rapidly expanding, capital-intensive firms, leading to a decline in venture capital funding for startups in 2023.

Monzo was founded back in 2015 by Tom Blomfield and is best known for its hot coral debit cards. Monzo is a neobank, originally founded in Britain, but now has a global user base. As of February 2024, Monzo has over 9 million customers.

In May 2023, the company announced that its revenue had surged to £355.6 million for the year ending February 2023, fuelled by increased interest rates on deposits and a threefold increase in its lending portfolio to £759.7 million.

Nonetheless, the bank reported a pre-tax loss of £116 million during the same timeframe, partly due to the rapid expansion of its lending necessitating larger provisions for potential non-performing loans. At that time, Monzo's Chief Executive, TS Anil, mentioned that the bank had achieved an unspecified profit in March and anticipated reaching annual profitability in the forthcoming financial year.