• U.K.-based digital bank Monzo has raised $430 million (£340 million) in a round led by Alphabet-owned CapitalG.
• The funds come about a year after Monzo achieved profitability, having reached nine million customers.
• Monzo’s post-money valuation is now $5 billion, up from $4.5 billion in 2022.

U.K.-based digital banking platform Monzo has raised $430 million (£340 million) in a round led by Alphabet-owned CapitalG.

Also participating in the round, which was first rumored last week,  were new investors, Google Ventures and HongShan Capital, along with existing contributors Passion Capital and Tencent. The new round boosts Monzo’s post-money valuation to $5 billion (£4 billion), which is up from the $4.5 billion valuation it received in 2022. According to Crunchbase, Monzo’s total investment amount now stands at $1.5 billion.

“With backing from global investors, we have the rocket fuel to go after our ambitions harder and faster, building Monzo into the one app that sits at the centre of our customers’ financial lives,” said company CEO TS Anil. “Each milestone we’ve reached to this point has given us more strength and speed to make strides towards our mission – now we’ll scale to even greater heights and seize the huge opportunity ahead.”

Monzo plans to use the funds to fuel expansion and to help the company improve its product roadmap. The timing of the funds, combined with the company’s expansion ambitions, come at a good time. That’s because, since it was founded in 2015, Monzo has acquired nine million users– two million of which were brought on just last year. This growth, combined with higher interest rates, pushed Monzo to achieve profitability in March of last year.

Monzo originally launched in 2015, the early days of digital challenger banks. In the U.K., the company offers both personal and business accounts that feature current and savings accounts, unsecured personal loans, and investment funds powered by BlackRock. U.S. users are limited to personal and joint checking accounts, but have the option to aggregate data from other financial services providers in order to get a holistic picture of their overall financial standing.

According to Monzo’s public roadmap, the company is currently working on budgeting improvements, paying interest on savings balances, and a faster onboarding experience. For the future, the company plans to develop digital billpay, capabilities and the ability to send checks, and also has stretch goals to launch a check depositing feature, subscription management, and merchant spending rules.

Photo by Mikhail Nilov

• Zūm Rails landed $7.78 million (CAD $10.5 million) in a Series A funding round led by Arthur Ventures.
• The company will use the funds to scale its U.S. growth and to further expand its payments offerings, including the launch of new banking-as-a-service features.
• Zūm Rails currently processes more than $1 billion in payments through its platform every month.

Canadian fintech Zūm Rails (pronounced zoom rails) brought in $7.78 million (CAD $10.5 million) in funding this week. The Series A round, which was led by U.S.-based Arthur Ventures, marks the company’s first VC funding round.

Founded in 2019, Zūm Rails seeks to make the payments experience less disjointed by integrating open banking and instant payments into a single gateway. This removes the need to stack technologies on top of one another and ultimately creates a better and more secure customer experience. The company launched in the U.S. market late last year, leveraging partnerships with Visa Direct, Mastercard, and MX.

Zūm Rails will use today’s funds to scale its U.S. growth and to further expand its payments offerings. Specifically, the company plans to launch new banking-as-a-service features for merchants and has plans to unveil a FedNow offering in the U.S. that will enable businesses to send and receive FDIC-insured payments in near-real-time. FedNow, the U.S. government’s real time payment service, launched last July.

“We’ve brought open banking and instant payments together in an omni-rail solution that enables companies to check off all of their payments needs from a single gateway,” said Zūm Rails Co-founder and CEO Marc Milewski. “With Arthur Ventures’ investment, we’re positioned for further expansion of our solution through the addition of banking-as-a-service and other new capabilities.”

As part of building out its U.S. operations, Zūm Rails has been working with financial service providers such as Fiserv to democratize access to open banking capabilities and real-time, FDIC-insured payments for businesses. “Having already transformed the Canadian payments landscape, the company is well-positioned to increase this growth with the investments it’s making in its product and scaling its presence across all of North America,” said Arthur Ventures Vice President Jake Olson.

As for what’s next, company Co-founder and Chief Sales Officer Miles Schwartz said that the company’s long-term vision transcends its individual capabilities. “Integrating these capabilities into a single solution that makes businesses’ lives easier will continue to be our focus as we double down on our expansion in the U.S.,” explained.

Zūm Rails, which up until now has been self-funded, currently processes more than $1 billion in payments through its platform every month. Among the company’s clients are Questrade, Coinsquare, and Desjardins.

Photo by Jonathan Petersson

• Fordefi has raised $10 million, bringing its total funding to $28 million.
• The company will use the funds to launch a crypto Wallet-as-a-Service offering.
• Fordefi leverages Multi-Party Computation (MPC), a technology that performs cryptographic operations across multiple devices without offering any single device access to the complete information.

After last year’s regulatory missteps in the crypto world froze activity in the decentralized finance space for months, the crypto winter is slowly beginning to thaw. In today’s move toward a crypto spring, Multi-Party Computation (MPC) digital wallet company Fordefi has raised $10 million in a Seed Extension round.

When added to the $18 million Fordefi raised in 2022, today’s round boosts the company’s total funding to $28 million. The round was led by Electric Capital and saw participation from both new and existing investors, including Paxos and Alchemy.

“Our mission at Fordefi has always been to facilitate secure management of digital assets,” said Fordefi CEO and Cofounder Josh Schwartz. “We’re proud to continue building on this mission and provide both web3 and web2 businesses with a crucial tool to enable safe crypto adoption for all participants. We are committed to strengthening the Web3 ecosystem and ensuring its accessibility while maintaining a strong focus on security and transparency.”

Founded in 2021, Fordefi’s MPC wallet platform is a cryptocurrency wallet that boasts higher security by leveraging MPC, a technology that performs cryptographic operations across multiple devices without offering any single device access to the complete information. When compared with single-key wallets, which risk a single point of compromise, MPC wallets offer relatively high security.

The New York-based company plans to use today’s funds to facilitate their launch of its wallet-as-a-service (WaaS) offering. Fordefi’s WaaS enables exchanges, fintechs, and web3 businesses to embed a user-owned wallet within their existing applications.

Electric Capital Cofounder and General Partner Curtis Spencer said that the WaaS offering “extends [Fordefi’s] industry leading technology to any business wanting their customers to have the best mix of security and user experience to get on-chain.”

By using the “as-a-Service” model, Fordefi is helping organizations take advantage of increased consumer interest in digital assets and decentralized finance while maintaining a high level of security.

As interest in decentralized finance grows, so has increased regulatory scrutiny in the space. In many cases, however, the promise of cost savings and increase efficiencies from decentralized finance and blockchain technology has surpassed the fear of repercussions. Because of this, we’ve seen a flurry of news activity in the Web3 finance so far this year. Some of the top news headlines in 2024 include cryptocurrency payments app Oobit raising $25 million, digital asset embedded finance solution Mesh raising an undisclosed amount from PayPal Ventures, Franklin Templeton launching its Bitcoin ETF, and Circle filing for an IPO.

Over the course of the next 11 months, movement in the crypto world will continue to be slow and adoption will still be cautious. However, we can expect to see the fear of decentralized finance begin to melt away as organizations begin to realize the cost savings and efficiencies in the space.

Photo by pratik prasad

• ModernFi raised $18.7 million, boosting its total to $23.2 million.
• Canapi Ventures led the round, which ModernFi will use to market its platform to community and regional banks.
• ModernFi’s API-driven deposit network helps banks raise, maintain, and manage their deposits.

API-driven deposit network ModernFi boosted its funding total to $23.2 million today after landing $18.7 million in Series A funding. The company will use the funds to market its platform to community and regional banks.

Canapi Ventures led the round, with participation from Andreessen Horowitz and Remarkable Ventures. Three banks, including Huntington National Bank, First Horizon, and Regions, also contributed.

ModernFi’s deposit growth solutions offer an API-driven approach that helps financial institutions efficiently raise and manage deposits. The company helps banks identify and entice potential depositors using personalized marketing campaigns, easy onboarding experiences, competitive interest rates, flexible account options, and by offering depositors extended insurance.

The company reduces reliance on manual processes and built its deposit network on a modern tech stack, which reduces friction for end users and facilitates integration for banks.

Today’s high interest rate environment, combined with the shift toward real-time money movement in the U.S., have changed both the speed and stability of consumer deposits. These factors, combined with increased regulatory scrutiny on liquidity and funding, have required financial institutions to change how they manage their deposits. “Deposit management is a key priority for the banking sector right now,” explained First Horizon Bank Director of Transformation – Fintech & Emerging Technology Tyler Craft. “ModernFi’s technology to streamline onboarding and operations for depositors and banks provides an innovative additional way for our industry to serve clients.”

“Community and regional banks form the foundation of the American economy, providing an outsized amount of credit and banking services to critical industries and areas that might otherwise be overlooked,” said ModernFi CEO and Cofounder Paolo Bertolotti. “Faced with fundamental shifts in the behavior of deposits, institutions benefit from modern tools to manage and grow their funding. ModernFi has been privileged to help institutions of all sizes protect their deposit base, and the team looks forward to continuing its support of the sector.”

Bertolotti and his co-founder Adam DeVita founded ModernFi in 2022.

Photo by Monstera Production

• Aqua Security raised $60 million in follow-on Series E funding this week. The investment boosts the cloud native security platform’s valuation to more than $1 billion.
• New investor Evolution Equity Partners led the round. Existing investors Insight Partners, Lightspeed Venture Partners, and StepStone Group also participated.
• Founded in 2015, Aqua Security maintains headquarters in Boston, Massachusetts and in Israel.

With six of the top 10 banks in North America and six of the top seven banks in Canada among its customers, Aqua Security is the latest security platform to earn unicorn status.

Headquartered in Boston, Massachusetts – and in Israel – cloud native security platform Aqua Security has raised $60 million in funding. The round was an extension of the firm’s Series E round, and was led by new investor Evolution Equity Partners. Featuring participation from existing investors Insight Partners, Lightspeed Venture Partners, and StepStone Group, the investment boosts the Aqua Security’s valuation above $1 billion.

“Eight years ago, we envisioned a world where all new applications would be built native to the cloud,” company co-founder and CEO Dror Davidoff said. “Today we are here in a market we pioneered with a purpose-built solution to protect customers’ digital transformations. We are excited for what’s ahead in 2024.”

Founded in 2015, Aqua Security specializes in protecting cloud native environments. The company helps its customers build applications that are, according to Aqua Security co-founder and CTO Amir Jerbi, “secure by design, enabling agile DevOps and hybrid cloud deployment with no compromise on security or compliance.” The company’s Cloud Native Application Protection Platform (CNAPP) secures the full application lifecycle from threat prevention, detection, and response. This includes software supply chain security to ensure code integrity and minimize vectors for attack. The platform also provides vulnerability scanning and management, as well as comprehensive, advanced malware detection.

This week’s investment takes the company’s total equity funding to $325 million. The investment also follows a year in which Aqua Security enjoyed a 65% increase in new business and a sizable amount of industry recognition. Among these accolades were inclusion in the Fortune Cyber 60 and listing among the Gartner Market Guide for Cloud-Native.

Photo by Igor Faoro