Chinese tech company Tencent has taken a small stake in online bank Monzo, as part of a $100m top-up following its recent $500m funding round led by Abu Dhabi Growth Fund, a report from Sky News has revealed.
Monzo did not disclose details of Tencent’s stake, but the report from Sky News revealed that the Chinese firm was investing a minority of a $100m capital injection, citing a source close to the process.
The digital bank reached a $4.5bn valuation in December 2021, following a slump in 2020. The $500m funding round, which helped Monzo reach this valuation, came as Monzo recorded 200% growth since the start of 2021.
TS Anil, Monzo’s chief executive, said, “The high level of investor interest we’ve had in this round is testament to our performance as well as the huge opportunity that lies ahead.
“With the backing of some of the best names in the investment community, we’re going into next year with big ambitions – and we’re just getting started.”
Monzo is currently under an investigation from the UK’s Financial Conduct Authority for potential breaches of financial crime and money laundering. The bank said it had been notified by the regulator about the investigation, which is still in its early stages. Monzo stated it has made major investments into its controls around financial crime and is a priority for the business.
Tencent has a growing FinTech portfolio, with investments in Argentine personal finance app Ualá, Digital wealth manager Scalable Capital, French startups Qonto and Lydia, and challenger banks such as Germany’s N26, Brazil’s Nubank and Tyme of South Africa.
Tencent was busy in 2021 investing into several prominent FinTech companies around the world.
One of its recent forays was a $70m Series B extension investment into Tyme, which it made alongside British investor CDC. Tyme is a digital banking group that is aimed at emerging markets around the world and is currently looking at boosting its presence in South Africa and the Philippines. The WealthTech company claims to be one of the fastest growing digital banks, having amassed four million customers in 32 months.
Another notable investment from Tencent in 2021 was a re-up in France-based Lydia. The FinTech company, which stylises itself as the “financial services super-app”, secured $100m in the round and surpassed a $1bn valuation. Tencent co-led the round with Accel and Founders Future. Lydia is a mobile-based financial services app that lets users manage all their money through a single platform.
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