Monzo has become the latest UK tech start-up to reach “unicorn” status with a valuation of more than £1bn after raising £85mln from US venture capital investors.
The challenger bank, known for its bright orange debit cards and smartphone app that instantly lists purchases, raised the new funds from venture firms Accel Partners and General Catalyst.
It is also planning a £20mln crowdfunding round after raising £71mln in an equity raise from Goodwater Capital in November last year.
The new funds see the bank achieve "unicorn" status -- a privately held start-up company that is valued at more than US$1bn.
READ: Monzo said to be planning £20mln crowdfunding as it eyes unicorn status
Monzo, which recently switched its pre-paid card system to current accounts, has become popular among millennials. The bank said it now has more than one million customers and account for 15% of all new bank accounts opening in the UK.
“It’s incredible that more than one million people are now using Monzo and a testament to all the hard work that’s gone into building the company over the last three-and-a-half years,” said chief executive Tom Blomfeld.
General Catalyst managing director Adam Valkin said: “Tom told me four years ago that he wanted to build an entirely new bank for the mobile generation from the ground up... in the process, they have become one of the fastest growing consumer financial applications in history."
Monzo is yet to make a profit. In the year to February, it made a loss of £33.1mln, compared to £7.9mln the previous year, and generated an operating income of just £1.8mln.
The group faces mounting competition from fintech rivals in the UK. One of its main rivals, Revoult, raised US$250mln earlier this year at a valuation of US$1.7bn while Berlin fintech start-up N26 has said it would launch its banking app in the UK.