China’s Tencent acquires a stake in British digital bank Monzo

Chinese technology group Tencent has invested in Monzo. Monzo is the latest international investor to join a round of financing that valued the British digital bank at US$4.5 billion.

The move announced on Friday underscores that Monzo’s wealth is rapidly recovering after the difficult start of the pandemic depressed its valuation and even triggered warnings that it may be difficult to make ends meet.

Monzo CEO TS Anil said: “With the support of some of the best companies in the investment world, we will enter next year with ambitions-and we are just beginning.”

As China’s largest company and one of the most active technology investors, Tencent has established an important global financial technology investment portfolio. In recent years, transactions include holdings of Argentine personal finance app Ualá, French startups Qonto and Lydia, and South Africa Shares in challenger bank Tyme.

Its investment in Monzo is part of a $100 million recharge $500 million round Led by the Abu Dhabi Growth Fund, the Financial Times first reported in early December.

The actions of the Chinese group followed 919 million pounds transaction In July, it acquired the British game developer Sumo Group, which has produced games for Sony, Microsoft and Sega.

The Shenzhen owner of Chinese messaging service WeChat has been Acquisition frenzy In the past year, although Beijing has strengthened its scrutiny of Chinese technology groups, it has diversified its global technology companies’ investment portfolios.

Sky News first reported on Monzo’s latest funding, reflecting the astonishing rebound in its valuation. After a sharp decline in card transaction volume, the February valuation fell from £2 billion in 2019 to £1.25 billion.

The online bank announced a statutory net loss of 130 million pounds in 2020, an increase of 13% from 2019. At that time, the auditor Ernst & Young warned for the second year in a row that there was “significant uncertainty” in its ability to continue operations. Care.

Weekly newsletter

For the latest news and views on fintech from the Global Correspondent Network of the Financial Times, please subscribe to our weekly newsletter #fintechFT

Sign up here with one click

Monzo has also faced regulatory setbacks in the past year, including investigation The Financial Conduct Authority investigated possible violations of anti-money laundering laws.

October it Withdraw its application After the regulator said it was unlikely to get approval, apply for a U.S. bank license.

But investors have been paying attention to its success, and revenue in 2021 has doubled from the previous year. A quarter of its revenue comes from new products launched during the pandemic, including its business and premium accounts, as it seeks to diversify.

According to people familiar with the matter, it is also exploring new developments, such as a platform for retail investors to invest in stocks. This may include cryptocurrency trading, although the plan is only in the exploratory stage.

However, Monzo’s valuation is still lower than its main British digital competitor, Revolut, which achieved a valuation of $33 billion in a funding round led by SoftBank Vision Fund 2 and Tiger Global Management in July.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *