Digital banking provider Monzo Bank Ltd. today disclosed that it has completed a secondary sale at a $5.9 billion valuation.

A secondary sale is a transaction that allows a startup’s employees and early investors to sell some of their shares. According to Monzo, Singapore’s CIG sovereign wealth fund and StepStone Group bought shares in the deal. The company didn’t disclose the value of the sale. 

London-based Monzo launched in 2015 with a mobile banking app positioned as an alternative to traditional financial institutions. In the years since, it has built up an installed base of more than 10 million consumers. The platform is also used by over 400,000 businesses as of June, about twice as many as a year earlier.

Monzo’s consumer accounts come with a payment card and a cashback feature that refunds a small percentage of certain purchases. A budgeting tool helps users set spending limits. Monzo offers a number of other features as well, including an investment service that provides access to three funds with varying levels of risk.

The business version of Monzo, in turn, includes an expanded set of capabilities. The company waives fees on certain bank transfers and provides access to loans. Additionally, account holders can create multiple virtual payment cards to manage supplier payments.

Monzo’s business accounts provide integrations with several third-party financial applications. A company can automatically sync transaction logs to its accounting software and thereby avoid manual data entry. Additionally, a Stripe integration enables businesses to process in-store purchases using a mobile device.

The $5.9 billion valuation that Monzo received in its secondary sale represents a $700 million increase over what it was worth following a May funding round. The valuation bump is a reflection of the company’s rapid growth. A month after the May round, Monzo disclosed that its revenue more than doubled in its most recent fiscal year to £880 million, or about $1.15 billion.

To maintain its sales momentum, the company plans to establish an office in Ireland. The new hub will enable Monzo to provide banking services in the European Union. TechCrunch reported that the company also plans to grow its presence in the U.S., where its platform has been available since 2022.

Monzo’s secondary sale comes two months after one of its top rivals in the U.K. digital banking market, Revolut Ltd., completed a similar transaction. The latter company boosted its valuation to $45 billion from the $31 billion it was worth in 2021. Shortly after the secondary sale, rumors emerged that Revolut is holding discussions about an initial public offering. 

Image: Monzo