Monzo plans funding round at £7.5bn valuation

Monzo plans to raise the money from venture capital investors rather than sell a stake to a buyout firm. The bank has not said how much the round would raise. One person familiar with the discussions said the board had preferred a takeover or a private equity deal, because a buyout would have brought a much larger investment than a venture round.

The shift follows the collapse of talks over a takeover by Nubank. Sky News reported on 26 September that the Brazilian digital bank was in early talks to buy Monzo for £8bn to £10bn in cash and shares. Nubank said on 30 September it was not proceeding. The talks ended over value, the Financial Times reported. Nubank is now likely to focus on growth in the US.

Private equity discussions ran alongside the Nubank approach. Advent International, TPG and CVC discussed taking a stake of up to 15%, with Monzo seeking an £8bn valuation. Those talks have stalled. Monzo declined to comment. The three firms did not immediately respond to requests for comment.

What £7.5bn compares with

Monzo was last valued at £4.5bn in an employee share sale in October 2024. A £7.5bn valuation would be roughly 67% higher. It is also £500m below the £8bn Monzo sought from buyout firms. At £7.5bn, Monzo would be worth about 86 times statutory pre-tax profit and 43 times adjusted profit, according to Tech Funding News calculations.

Monzo reported statutory pre-tax profit of £87.3m for the year to March 2026. That was up from £60.5m. Revenue rose 39% to £1.7bn. Adjusted pre-tax profit was 20% higher at £172.6m.

Revolut sold shares at a $115bn valuation. That is 50 times its 2025 pre-tax profit of $2.3bn. Revolut has 80 million customers. Monzo has more than 16 million, almost all of them in the UK. At today's exchange rates £7.5bn is about $10bn. That is less than a tenth of Revolut's value.

Autonomous, the equity research firm, called a price of £8bn to £10bn financially questionable. It said the range implied about seven times tangible book value, well above levels seen at comparable lenders.

What the money is for

Monzo wants the capital for European expansion. It opened in Ireland in April, closed its US business and launched in Spain in October.

The company has more than 5,000 staff. Monzo has not said when the round would close.