Monzo, the U.K. mobile-only bank, now has a valuation of $1.3 billion, pushing the startup into unicorn status.
Reuters, citing Monzo, reported the mobile bank said Wednesday (October 31) that it raised 85 million pounds — and as a result, has a valuation of more than $1 billion. Proceeds from the round of fundraising is going to double its headcount, noted Reuters. The latest fundraising round was led by Accel Partners and General Catalyst. Existing investors Passion Capital, Goodwater, Thrive Capital, Orange Digital Ventures and Stripe also participated.
With a valuation of $1.3 billion, Monzo is the most recent in a string of U.K. banks that have hit that level in the startup world. Unicorn status happens when the company has a valuation of $1 billion or more. Reuters noted the bank, which launched in 2015, isn’t profitable. The company said its capital value has jumped from 280 million pounds in 2017.
Monzo chief executive Tom Blomfield told Reuters that Monzo has 1.1 million users and that about 100,000 new Monzo accounts are opened monthly. That would give the company a user base of 2.3 million in a 12 month period. The company wants to grow its workforce with the funding to between 800 and 900. Blomfield said every department within the company will double over the next 12 months.
While acquiring customers at a quick pace has resulted in widening pre-tax loss, the bank is improving on that thanks to a reduction in the cost to acquire new customers and launching some lending. Blomfield said in the past few weeks Monzo has made around 5 pounds per year from every new account it opens. What’s more, he said, a quarter of customers deposit their salaries with Monzo, which is up from 8 percent at the beginning of this year. In order for the bank to make money users have to treat the Monzo account as their main bank account, noted the report.