Monzo has raised $430m in a funding round led by the independent venture arm of Alphabet, CapitalG, valuing the bank at $5bn. Chinese venture capital firm, HongShan also backed the round along with existing investors Tencent and Passion Capital. Monzo first attempted to launch in the US in 2019. It agreed a deal with community bank, Sutton Bank and aimed to secure a full US banking licence. The attempt was abandoned in 2021. Monzo has also reportedly considered expansion in the EU but has not disclosed which markets in Europe are under review. Monzo reported profitability in the first two months of 2023. For the year ending February 2023, it reported net operating income of £214.5m, almost doubling year-over-year from £114m. Losses reduced slightly, to £116.3m from £119m the previous year.

Since then, Monzo has expanded its product range, launching its first investment products in funds managed by BlackRock.

Monzo Investments launch

Monzo Investments are aimed at the bank’s majority Generation Z customer base. With Gen Z the least likely generation to hold investment products, Monzo’s low-barrier solution can help spur investment interest among this group.

According to GlobalData’s 2023 Financial Services Consumer Survey, 52% of Monzo’s customers belong to Generation Z (<27 years old) and two thirds are under 30 years old. These customers are less likely to hold investment products. Only 23% of Generation Z and 29% of millennials are investors. These proportions are significantly lower than older generations.

Monzo Investments can help its young customers take their first steps into investing. The neobank allows investors to start with as little as a £1 ($1.23) investment and allows users to select between three different funds with varying levels of risk.

Monzo retail banking customers hit 9m

Monzo customer numbers have grown to 9 million retail banking customers and 400,000 business banking customers. Last month, Monzo again ranked first in the CMA independent survey of the largest UK retail banks. Monzo first featured in the survey in August 2020. Since then, it has run rings around its more established rivals.

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In the eight surveys since August 2020, Monzo has ranked top on five occasions and joint top in the other three surveys.