Monzo Courts SoftBank As Part Of £100M Capital Raise
British banking unicorn Monzo is in talks with Japanese investment conglomerate SoftBank for financial assistance in its growth plans into the U.S. Monzo Co-founder Tom Blomfield sat down with senior officials from SoftBank’s Vision Fund, sources told The Telegraph on Sunday (Jan. 26).
The digital bank is looking to raise around £100 million (nearly $130.6 million USD) in new funding. The London-headquartered bank raised £113 million in June from the U.S. fund Y Combinator Continuity, which valued the firm at double its earlier valuation in excess of £2 billion.
One of five Monzo co-founders, Blomfield started talks with SoftBank more than a year ago. Earlier in January, he sat down with the investors at their Mayfair office. No deal was struck yet, and the talks are still in the beginning phase, sources said.
SoftBank has been looking at European FinTech startups, the source told The Telegraph. The investment group also sat down with Monzo’s competitor Revolut, and recently funded London-based digital bank startup OakNorth with £297.7 million. SoftBank’s future FinTech funding will likely come by way of its second Vision Fund, which started making investments last year. The conglomerate’s first Vision Fund invested $100 billion in startups like Uber and WeWork.
Monzo launched in 2015, and now serves an estimated 3.7 million U.K. customers. It recently started trialing its banking app in the U.S., offering limited services in Los Angeles. The startup spent its initial funds quickly as it pursued expansion. It has recorded losses of roughly £55 million in the year to February, up from £33 million in the same time period one year earlier.
In addition, Monzo hired former Visa executive TS Anil as CEO of its U.S. operations, reporting to Bloomfield. Anil brings 25-plus years of global banking experience across Europe, the Middle East, Africa, Asia-Pacific and the Americas. He is charged with regulatory engagement and hiring to drive Monzo’s U.S. expansion. His appointment follows other recent senior hires to the U.S. team, including Joel Tashjian as general counsel and Erin Coppin as head of financial crime, bringing the U.S. staff total to 20.