Monzo reaches £20mln crowdfunding target after customers invest

Monzo reached “unicorn” status, a term used to describe a privately-held start-up company valued at more than US$1bn, in October

Monzo is known for its bright orange debit cards

Challenger bank Monzo said it has reached its target to raise £20mln in a crowdfunding round that was launched on Monday.

The crowdfunding was first made available to existing investors at the start of the week before Monzo customers could take part on Wednesday.

Monzo, known for its bright orange debit cards and smartphone app that gives users a summary of their monthly spending, said it raised more than £2.03mln from existing investors and more than £17.9mln in two hours and 45 minutes on Wednesday.

The tech start-up said 36,006 people invested in Monzo in the crowdfunding, managed through investment platform Crowdcube. Customers were allowed to invest up to £2,000 by using the banking app. 

In October Monzo reached “unicorn” status, a term used to describe a privately-held start-up company valued at more than US$1bn, after raising £85mln through venture capital investors Accel Partners and General Catalyst.

The group also secured £71mln in an equity raise from Goodwater Capital in November last year.

READ: Monzo set to launch £20mln crowdfunding after reaching 'unicorn' status

The funds from the crowdfunding will be used to help Monzo invest in its technology, including upgrades to its smartphone app. The app recently introduced a new feature that allows users to block gambling transactions.

The company started in March 2016 through the launch of its Mondo public beta app after raising £1mln in its first crowdfunding round. 

Four months later, the firm changed its name to Monzo at the suggestion of customers.

In April last year, the Financial Conduct Authority gave Monzo a full UK banking licence and the company raised £12mln in another crowdfunding, beating its £2.5mln target.

The bank finished rolling customers over to UK current accounts in April this year. It now has about 1.2mln current account customers.

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