Monzo is reportedly in the final stages of negotiating a fresh round of funding that might see its valuation drop by 40%.
The fast-growing digital-only bank is looking to raise £70-80mln to strengthen its balance sheet, but the price of the funding values the business at £1.25bn compared to £2bn at the time of its last cash injection a year ago, according to reports today.
According to the FT, the majority of the funding will come from existing shareholders such as Accel, Y Combinator Continuity, Goodwater Capital and Passion Capital rather than new investors.
As the coronavirus crisis bites into consumer spending, Monzo’s customers are cutting purchases on their debit cards, while the restrictions on international travel have meant fewer transactions abroad.
Monzo built its reputation as a card for travelling overseas though has now expanded to full banking in the UK and has plans to apply for a licence in the US.
Recently chief executive Tom Blomfield agreed to waive his salary for a year while other senior management took 25% pay cuts.
Monzo expects to close the funding round within the next month with the final value and amount raised yet to settled, said the report.
Published at Fri, 15 May 2020 12:07:00 +0000-Monzo valuation could drop by 40% as customers curb spending