UK Bank Monzo Seeks to Raise $411M on Possible $4.1B Valuation

The British digital bank Monzo has begun talks in hopes of raising at least $411 million (£300m) with eyes on a possible valuation of $4.1 billion.

As Sky News reported on Wednesday (Oct. 27), the company is in discussion with a number of investors, who would contribute about 75% of the funding, with the rest coming from existing backers.

Sources tell Sky the valuation would show a significant growth in revenue for Monzo, which was valued at $1.5 billion in its last round of capital-raising earlier in the year. The bank declined to comment.

The Sky report says this might seem surprising to the bank’s peers in light of Monzo’s decision earlier this month to halt its attempt to get a U.S. banking license.

Read more: Challenger Bank Monzo Abandons US Banking License Application

As PYMNTS reported at the time, Monzo withdrew its application for a banking license following discussions with regulators at the Office of the Comptroller of the Currency.

That decision came just after a phishing incident in which a scammer used a Monzo account and a payments initiation service provider (PISP) to steal millions from Barclays accounts. The bank has also come under fire for alleged violations of anti-money laundering laws, with the U.K.’s Financial Conduct Authority (FCA) launching an investigation in July.

Despite the setback in the U.S., Monzo has begun expanding in other ways. In September, the bank launched an effort to simplify bill-paying and household budgeting by letting Monzo Plus and Monzo Premium account holders make card payments from their various “pots” or digital piggy banks.

Learn more: UK Digital Bank Monzo Enables Card Payments From Earmarked Savings

Monzo, which exists only as an app and at ATMs, also recently rolled out a buy now, pay later service allowing customers to make card payments in installments.

And even if it gets the valuation it wants, Sky says it would still be worth considerably less than some of its competitors in the FinTech sector. Revolut, for example, is now the U.K.’s most valuable tech company.