Collison brothers’ Stripe takes a stake in popular UK challenger bank.
Payments player Stripe is among a cohort of new investors in UK-regulated challenger bank Monzo’s £71m ($93m) investment round.
Stripe, the payments company founded by Irish brothers Patrick and John Collison in San Francisco, joins Goodwater Capital and investor Michael Moritz (through his charitable investment vehicles) in the round.
‘Customers love Monzo because the company treats them right, solves their problems, and does so with total transparency’
– CHI-HUA CHIEN
They join existing investors Eileen Burbidge’s Passion Capital as well as Joshua Kushner’s Thrive Capital, and Orange Digital Ventures in the round.
Monzo has more than 20,000 current-account holders and the start-up bank has amassed something of a cult-like following in the UK, with almost 500,000 people using its distinctive hot coral cards and thousands more on the waiting list.
The £71m round values the company at £280m ($366m), doubling its valuation at the last round.
“This is an incredible endorsement of our strategy so far, and sets us up to continue the growth we’ve seen this year into 2018,” said Monzo CEO Tom Blomfield.
“We want to make it as easy as possible for people to manage and make the most of their money, to give people total visibility and control over all of their finances, and offer them their pick of the best products that the market has to offer.”
Blomfield said the capital will be used to bolster hiring and continue driving growth. Based in Monzo’s London HQ, the team now numbers 210, more than double the 80 people employed at the time of the last round.
The start-up bank said that about £1.5m ($2m) of this round has also been reserved to allow existing crowdfunding investors to increase their investment amounts if they choose.
More than 8,000 people have invested in Monzo through crowdfunding, allowing the community to take a personal stake in their own bank.
In March last year, Monzo raised £1m ($1.3m) in 96 seconds, in what remains the quickest crowdfunding campaign in history. The company also has further plans to launch a large crowdfunding campaign in 2018, to give as many people as possible the opportunity to invest.
As the UK prepares to lead the financial services sector with the imminent arrival of new open banking regulations, Monzo has already begun bringing current accounts to existing users, a process that will be complete before the end of the year.
It said the wider public can now download the app to join the waiting list for current accounts, which will be offered to new users at the start of 2018.
“Monzo’s growth in the UK has been incredible, and the fact that it’s been driven by word of mouth makes it even more exciting,” said Chi-Hua Chien, managing partner of Goodwater Capital.
“Customers love Monzo because the company treats them right, solves their problems, and does so with total transparency. These values express themselves powerfully through Monzo’s leadership team, world-class product and innovative services.
“Monzo is already making it as simple and seamless as possible for almost half a million people to manage their money, and we’re looking forward to helping the team bring Monzo to millions more, in the UK and beyond.”