Startup, app-only bank Monzo has announced an “interim” funding round of £4.8 million, shortly after securing its banking licence.
The funding round, led by long-term backer Passion Capital, values the company at £50 million, up from the £30 million it was valued at in its February funding round.
The bridging round takes the total raised by Monzo, founded in 2015, to £12.8 million.
Monzo CEO Tom Blomfield says in an emailed statement: “We’re grateful for the ongoing support of Passion Capital with this latest fundraise.
“With the huge success of our Beta programme, we wanted to raise additional funding to allow us to continue growing and keep up with the overwhelming demand. With Passion’s support we’ve been able to close this round pretty quickly, so we can get back to working on building the bank without too much distraction.”
Monzo has 50,000 of its pre-paid card in circulation but a waiting list of 250,000. Monzo is hoping that the extra cash will allow it to ramp up distribution of cards to take advantage of customer demand.
The startup launched an Android version of its app at the end of September and has 8,000 Android customers, Monzo confirmed to BI.
Monzo, formerly known as Mondo, aims to create a digital-only bank for the mobile generation that offers things like instant notifications of transactions and balances, a detailed Facebook-style feed of what you have spent your money on, and a breakdown of spending across the month.
The startup currently offers a pre-paid card to customers but plans to launch a full bank account next year after gaining a banking licence in August.
Blomfield says in the release: "We launched these Monzo accounts as a beta trial, ahead of our full current accounts available next year. For a pilot programme, the response has been incredible - we've seen more than £45 million spent by 50,000 people in over 150 countries. What's more, over 60% of the Beta accounts are being used actively."
Blomfield told BI earlier this year that Monzo will have to raise at least £15 million as part of requirements from the regulator but the startup says the £4.8 million in not included in this target. Monzo plans to raise that amount in early 2017, partially through crowdfunding. (The bank raised £1 million in just 96 seconds on Crowdcube earlier this year.)
Mondo is one of a number of so-called "neobanks" in the UK: app-only banks with no branch network. Three others have so far been granted licences: Atom, Tandem, and Starling. Atom is the only one that has so far launched a full banking product to the public, releasing a savings account earlier this year.