£2.5m reserved for crowdfunding round will allow anybody to pledge between £10-1000.
Tom Blomfield, founder and CEO of Monzo, says he is “incredibly excited” about the conclusion of a £19.5m round of investment for the startup bank – and well he might be.
Blomfield left another challenger bank, Starling, to found Mondo, which later changed its name to Monzo – and he has been rewarded for his entrepreneurial instinct with a massive injection of funds – led by Thrive Capital, Passion Capital and Orange Digital Ventures.
In a blog post, Blomfield says that he will use the money to launch current account capabilities this summer, increase headcount at the firm, and “continue to build Monzo into the world’s best bank.” The idea being that a new breed of “challenger” bank can disrupt the existing status quo by being more transparent and charging cheaper fees, because they have no creaking legacy systems to support and are therefore more agile, and better value for customers.
But the best part of the raise for bystander’s like you and I, HHH’ers, is that Monzo have reserved £2.5m for a crowdfunding campaign, meaning individual backers can benefit from investing at the same valuation as the VCs.
Starting from next Tuesday 28th Feb, the crowdfunding campaign will enter a two-week pre-registration period where backers will be invited to pledge anything from £10 to £1,000 per person, “to give everyone a fair shot”.
If the campaign is over-subscribed a ballot will be held which will randomly select backers and invite them to complete via crowdfunding platform Crowdcube.
The competition to be the biggest and best Challenger bank is certainly hotting up – Tandem have raised $77.8m in total to fund their assault on high street banks, whilst Starling bank have $70m of funding in the war chest, and Durham based Atom bank have completed 3 rounds, raising an eye-watering $292m.
Just as there are 4 major high-street banks, HSBC, Barclays, Lloyds, and RBS, it seems 4 is the magic number when it comes to those bidding to replace them at personal banking’s top table.
Let battle commence!