Investors are flocking to fintech, where the UK is the top destination for venture capitalists.
Monzo, the UK online bank, is understood to have secured a new round of financing of US-owned accelerator Y Combinator, which has secured a new round of investment of 113 million pounds ($144 million).
Monzo, a British online bank, has just completed a new round of funding that has doubled the start-up’s valuation and catapult it into the ranks of Britain’s most valuable fintech companies.
Monzo, which raised $1.25 billion in valuation at the end of 2018, revealed that Tuesday’s new round of fund-raising brought in $144 million. Among British fintech companies, Monzo’s latest valuation is at a high level, chasing the size of financing for European rivals Greensill and Oak North. Greensill and OakNorth, both British financial innovation companies, received funds from the Vision Fund of Japan’s softbank group this year. Softbank invested $800 million in Greensill, with a valuation of about $3.5 billion. OakNorth, meanwhile, received a $440 million investment from softbank in February, valuing it at about $2.8 billion. Monzo is now valued at more than £2 billion ($2.5 billion), double its £1 billion valuation when it raised capital last October. The fintech company has gained a following in the UK with its bright coral bank CARDS and app-only checking accounts.
Monzo, which already has 2m users and offers services such as deposits, payments, short-term loans and personal finance, has been seen as a threat to traditional Banks because of its strong growth. Including the Starling Bank (the Bank on the net and Revolut in recent years, the rapid development in Europe, the user object is give priority to the younger generation. Take Monzo as an example, it is easy and convenient for users to open an account and get a bank card. It only needs to download the mobile App to open an account for 5 minutes and it can be used without any address proof. It is most popular with overseas students or those who have difficulty in contacting with traditional Banks.
Monzo is also preparing for expansion in the U.S. market, but it is expensive to set up an office in the U.S. and compete with local peers.
Chime, a well-known virtual bank in the United States, now has 4 million users, and recently registered more than 200,000 each month. It is not easy for the British Monzo to compete with Chime. Founded in 2014, Chime has become the market leader in U.S. online banking, with $450 million in user transactions.
Mobile apps are easy to attract a large number of young customers
The average American charges about $329 a year for bank account services, more than $3,000 a decade. Headquartered in San Francisco, the U.S.-based Online Bank Chime, its attraction is no monthly fee, no minimum deposit, no overdraft penalty, download mobile app easy to use, attract a large number of young users between 20 and 30 years old.
In fact, the rapid development of online banking in Europe and America in recent years is also due to the support of millennials. The biggest advantage of online banking is that there is no minimum deposit, no minimum balance charge, and no other miscellaneous charges such as overdue or overdraft penalty. There is no need to spend time waiting in line at the bank to go through the formalities. Around the world, people can use banking services through mobile apps 24 hours a day. This kind of virtual banking mode is naturally the most popular among millennials.