Monzo has hit a $4.5 billion valuation in its latest funding round, according to a report from The Financial Times (FT).

The valuation is well over double the $1.6 billion it achieved in its Series G funding round in February 2021, which was a fall from its peak valuation of $2.5 billion.

The round was led by the sovereign wealth fund Abu Dhabi Growth Fund according to the newspaper. Coatue, Alpha Wave Ventures, Accelm and Goodwater also joined the funding.

The FT said the London-based challenger bank has finalised the initial investment of $475 million.

A second injection is expected to be agreed within a couple of weeks according the report, which will take the total raised by the bank above $500 million.

The news comes after the challenger bank has made moves towards diversifying its portfolio in the past year.

In September, Monzo revealed it intended to enter the Buy Now, Pay Later (BNPL) market.

Users of the BNPL product “Flex” will now be able to pay via Apple Pay or Google Pay using a virtual card.

"This round comes off the back of a fantastic year for Monzo,” said TS Anil, chief executive at Monzo, as reported by the FT. “We’ve seen record revenues, launched new products and tools and continued to top the charts for our services.

“We’ve hired some incredible talent.”

He added: "This investment means we’ll grow further and faster as we continue on our journey to reinvent banking, and become the one app that sits at the centre of our customers’ financial lives."

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