Monzo, a British neobank, secures $430 million in funding from an Alphabet-led round to reenter the US market.

• CapitalG, the independent venture arm of Alphabet, led a $430 million funding round for Monzo.
• Monzo announced that it would use the new funds to speed up its growth plans, including another attempt to bring its services to the US market.
• In the first two months of 2023, Monzo reported bumper growth and entered the black for the first time.

On Tuesday, Monzo, a British digital bank, secured $430 million in funding from investors to restart its operations in the United States.

CapitalG, the independent venture arm of Google parent company, led a new funding round for Monzo, resulting in the company raising the necessary funds.

The Chinese venture capital firm HongShan, which separated from Sequoia Capital last year, joined the round of funding, along with existing investors and Passion Capital.

Monzo, a highly popular app-only bank in the U.K., announced that it will use the new funds to speed up its growth plans, including another attempt to bring its services to the U.S.

Monzo CEO TS Anil stated that with the support of global investors, the company has the necessary resources to pursue its goals more aggressively and efficiently, making Monzo the central financial app for its customers.

"As we have achieved each milestone, our strength and speed have increased, allowing us to progress further towards our mission. Now, we will continue to grow and take advantage of the significant opportunity that lies ahead."

Monzo's growth in 2023 leads to a surge in new cash inflows.

In the first two months of 2023, Monzo, a U.K. neobank, entered the black for the first time, reporting 88% growth in revenues to £214.5 million ($272 million), up from £114 million in 2022.

Relaunching in the U.S.

In the U.S., a significant amount of the funds will be used to assist Monzo in restarting its services.

In 2019, Monzo attempted to launch in the U.S. through a beta product, partnering with Sutton Bank to make it live in the country.

It had sought to obtain a full U.S. bank license, but was unable to achieve this goal after two years of unproductive dialogue with regulatory bodies in 2021.

Monzo has decided to partner with a company in the U.S. to avoid obtaining a full bank license and serve customers in the country.

In October 2023, the firm appointed Conor Walsh, a former executive at Block's Cash App division, as its new U.S. CEO to lead a renewed effort to penetrate the American market.

Monzo's new round of funding was preceded by a focus on developing new products for the bank. In 2023, Monzo launched investment pots that enabled customers to invest their money in a variety of funds managed by BlackRock, with varying levels of risk.

Monzo now has over 9 million retail customers in the U.K., with 2 million of them joining in 2023 alone. Additionally, the company has 400,000 business banking customers.