Introduction to Monzo’s Expansion Plans
Monzo, a digital bank with over 11 million retail customers in the UK, is increasing its appointment of investment bankers to manage a stock market listing valued at over £6 billion. The company, which counts one in five British adults among its customers, is working with Morgan Stanley to meet with potential investors ahead of a possible initial public offering (IPO) next year.
Preparations for the IPO
The company has not yet officially hired bankers to work on the listing, but Morgan Stanley is expected to play a key role in the deal. The timing, size, and location of the IPO are still to be determined and will depend on market conditions in London and New York. However, London is currently considered the most likely venue for Monzo’s IPO by board members and investors.
Company Background
Monzo has become one of the most successful and valuable fintech companies in the UK, employing almost 4,000 people. The company collected over £500 million last year by selling new shares to a group of investors led by Capital G, a Google department in Alphabet. This primary share sale valued the business at £4.1 billion.
Potential Valuation
An IPO, including new capital, would likely value Monzo at over £6 billion, possibly reaching £7 billion, according to bank sources. The company is now profitable and has diversified into investments and instant-access savings. It has also launched pension products and accounts for children under the age of 16.
Market Position
Monzo is part of a new generation of banks that have been created since the last financial crisis and have started to gain a significant share of the UK retail banking market. Its competitors include Starling Bank and Revolut, which was valued at $45 billion in its last fundraising campaign and was awarded a bank license last year.
Recovery and Expansion
Monzo has recovered from a difficult time in 2020 when it was investigated by the City watchdog for potential breaches of money laundering and financial crime rules. The company has revised its corporate structure as it pursues international expansion and aims to attract new investors for its long-term growth strategy. It has investigated acquisition options in the US and Europe, although large deals are not considered to be immediately imminent.
