Mon. Jan 24th, 2022

Chinese technology group Tencent has taken a stake in Monzo, the latest international investor to join a round of funding valued at the British digital bank at $ 4.5 billion.

The move, which was unveiled on Friday, underscores a quick recovery in Monzo’s fortunes after a difficult start to the pandemic that shattered its valuation and even caused outside warnings that it could struggle to stay afloat. .

“With the support of some of the best names in the investment community, we’re going into big ambitions next year – and we’re just getting started,” said Monzo CEO TS Anil.

Tencent, one of China’s largest companies and most active technology investors, has built up a significant global fintech portfolio, with transactions over the past few years, including interests in Argentina’s personal finance app Ualá, French start-ups Qonto and Lydia, and the South African challenger bank Tyme.

His investment in Monzo is part of a $ 100 million addition to a $ 500m round led by the Abu Dhabi Growth Fund, which was first reported by the Financial Times in early December.

The Chinese group’s move follows a £ 919m transaction in July to buy UK game developer Sumo Group, which has made titles for Sony, Microsoft and Sega.

The Shenzhen-based owner of the Chinese messaging service WeChat was on a procurement has diversified its portfolio of global technology companies over the past year, even as Beijing intensifies its investigation into Chinese technology groups.

Monzo’s latest funding, first reported by Sky News, reflects a surprising recovery in its valuation, which fell to £ 1.25 billion in February after a sharp drop in card transactions, down from £ 2 billion in 2019 .

The online bank announced a statutory net loss of £ 130 million in 2020, an increase of 13 per cent compared to 2019. Auditors at the time warned EY for a second consecutive year of “material uncertainty” over its ability to continue to to go ahead. is coming.

Monzo has also experienced regulatory setbacks in recent years, including a investigation by the Financial Conduct Authority on possible violations of money laundering laws.

In October this withdrew his application for a U.S. banking license after regulators indicated it was unlikely it would be approved.

But investors focused on its successes, with revenue doubling in 2021 from the year before. A quarter of its revenue came from new products introduced during the pandemic, including its business and premium accounts, as it seeks to diversify.

It is also exploring new developments such as a platform for retail investors to invest in equities, according to people familiar with the matter. This may include trading in cryptocurrencies, although the planning is only in an exploratory stage.

However, Monzo’s valuation still follows its main British digital rival Revolut, which achieved a valuation of $ 33 billion in a July financing round led by SoftBank’s Vision Fund 2 and Tiger Global Management.

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