Digital bank Monzo is close to a new round of funding that would value the group at around £4bn, the Financial Times has reported.

According to people familiar with the matter, the move would represent a sign of investor confidence in the business.

Monzo is hoping to raise £350m from both new and existing investors and has indicated that it could finalise a deal in the next two weeks. This new capital could take Monzo’s valuation to £4bn, with the company valued at around £3.6bn on a so-called pre-money basis.

Alphabet’s investment fund, CapitalG, is expected to lead the funding round with Chinese venture capital fund HongShan, and US fintech investor Ribbit Capital, among other investors who will be taking stakes in Monzo for the first time.

Monzo launched in 2015 and originally operated through a mobile app and a prepaid debit card until April 2017, when its UK banking licence restrictions were lifted, enabling it to offer a full current account.

The bank’s most recent financial results, issued in June last year, showed an annual net loss of £116.3m on revenue of £355.6m. This revenue did however represent more than double its 2022 level of £154.2m, as the digital bank also revealed it had over 7.5 million customers as of May 2023.

According to the Financial Times, Monzo is anticipating to hit annual profitability in its next financial year.

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