Monzo is reportedly set to overtake rival Revolut to become the UK’s second most valuable fintech firm as it secures another round of funding.
The digital bank is understood to be closing a £100mln funding round that would double its valuation to US$2.5bn (£1.9bn), according to The Sunday Times.
The newspaper said Monzo’s board has agreed on the deal but will have to wait several months to receive approval from the Prudential Regulation Authority.
READ: Monzo reaches £20mln crowdfunding target after customers invest
The funding, which is being led by a new US investor, would make Monzo the second largest fintech startup behind business lending bank Oaknorth.
In December last year, Monzo raised £20mln in a crowdfunding in just under three hours.
Monzo reached “unicorn” status, a term used to describe a privately-held start-up company valued at more than US$1bn in October after raising £85mln through venture capital investors Accel Partners and General Catalyst.
Despite the investments, Monzo is yet to turn a profit. In 2017, it made a £33.1mln loss, compared to a £7.9mln loss a year earlier.
Monzo was founded in 2015, starting out as an app with a pre-paid card that allows users to track their spending in real-time.
In April 2017, the Financial Conduct Authority gave Monzo a full UK banking licence to launch a current account.
Monzo is now looking to expand its services with the launch of a new ISA and the roll-out of small business accounts.
Monzo hopes to secure a piece of the £775mln fund set up by Royal Bank of Scotland Group PLC (LON:RBS) for challenger banks to lend to small and medium-sized businesses.
RBS was required to set up the fund to boost competition in the sector as a condition of its bailout during the 2008 financial crisis.
