Fintech startup Monzo valued at $5.9 billion in secondary sale

Digital banking provider Monzo Bank Ltd. Today disclosed that it completed a secondary sale for a valuation of $5.9 billion.

A secondary sale is a transaction that allows a startup’s employees and early investors to sell some of their shares. According to Monzo, Singapore sovereign wealth fund CIG and StepStone Group bought shares in the deal. The company did not disclose the amount of the sale.

London-based Monzo launched a mobile banking app in 2015 positioned as an alternative to traditional financial institutions. In the years since, it has built an installed base of more than 10 million consumers. The platform was also used by more than 400,000 businesses in June, about twice as many as a year earlier.

Monzo’s consumer accounts come with a payment card and a cashback feature that refunds a small percentage of certain purchases. A budgeting tool helps users set spending limits. Monzo also offers a number of other features, including an investment service that provides access to three funds with varying levels of risk.

The professional version of Monzo, on the other hand, includes an expanded set of features. The company waives fees on certain bank transfers and provides access to loans. Additionally, account holders can create multiple virtual payment cards to manage vendor payments.

Monzo’s business accounts provide integrations with several third-party financial apps. A company can automatically synchronize transaction logs with its accounting software and avoid manual data entry. Additionally, a Stripe integration allows businesses to process in-store purchases using a mobile device.

The $5.9 billion valuation Monzo received in its secondary sale represents an increase of $700 million over what it was worth following a secondary sale. May Funding Round. Rising valuations reflect the company’s rapid growth. A month after the May cycle, Monzo revealed that its revenue more than doubled in its latest financial year, to £880 million, or about $1.15 billion.

To maintain its commercial momentum, the company plans to open an office in Ireland. The new hub will allow Monzo to provide banking services in the European Union. TechCrunch reported that the company also plans to increase its presence in the United States, where its platform has been available since 2022.

Monzo’s secondary sale comes two months after one of its main competitors in the UK digital banking market, Revolut Ltd., completed a similar transaction. The latter company increased its valuation to $45 billion, up from $31 billion in 2021. Shortly after the secondary sale, rumors emerged that Revolut is holding discussions on an IPO.

Picture: Monzo