Tencent, the Chinese-based tech group, has a new stake in Monzo, which shows a big recovery in Monzo’s fortunes as it’s now valued at $4.5 billion, Financial Times writes.
Monzo saw trouble earlier in the pandemic, when valuations plummeted and some speculated that the digital-first bank might not be able to survive.
Monzo saw its valuations fall to £1.25 billion from £2 billion in 2019 due to pandemic-era card transaction declines.
TS Anil, CEO, praised the backing of “some of the best names in the investment community” for helping it out.
Anil said the company had “big ambitions” for the new year.
Tencent has a big global FinTech portfolio and has deals in several other companies like Argentine personal finance app Ualá, Qonto and Lydia, both French startups, and challenger bank Tyme of South Africa.
Tencent’s investment in Monzo is a $100 million top-up to a $500 million round led by the Abu Dhabi growth fund.
Tencent also made a deal last July to buy Sumo Group, a games developer that has worked with Sony, Microsoft and Sega. With multiple other examples, Tencent has gone on something of an acquisition marathon in the past year.
PYMNTS wrote that Monzo was raising over $500 million in December, with the aforementioned valuation of $4.5 billion. The company was looking to delve more into cryptocurrency, along with plans to get more into buy now, pay later (BNPL) features.
Anil said at the time that the investments were going to see them “grow further and faster as we continue on our journey to reinvent banking, and become the one app that sits at the center of our customers’ financial lives.”
Monzo’s value has improved 300% since the beginning of 2021. The company was bolstered by a number of new customer sign-ups. Anil praised new product launches along with new hires for the help.