All press articles are referring to it as a new funding round 
FWIW the have done quite a few follow-on rounds over the years where they took a bit more at the same valuation. So like C1, C2, or whatever.
Nope it’s the same round led by Capital G, the independent growth fund of Alphabet, Google’s parent company. It’s just been expanded.
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Hey everyone, following the first close of our Series I fundraise in March, I’m back to confirm we’ve completed a second close. It brings an additional £150 million ($190 million) investment into Monzo from investors including CapitalG and Hedosophia. This takes the total raised in this round to around £500 million.
As we’ve raised an additional £150 million ($190 million) investment, post-money the company’s valued at £4.1 billion ($5.2 billion). The share price remains at £14.41 in line with the first close of this round.
We’re really pleased to see there’s ongoing appetite from respected investors to back Monzo, our strategy and the results it’s driving so far, as well as our plans for the future.
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This is the most naive statement I’ve ever read on the internet. They’re a BANK. Like any company, their sole purpose is to MAKE MONEY.
I really have no idea what to make of this “if you wanted to make a profit then you shouldn’t have bought shares” sentiment. What other reason is there to buy shares in a company?
Also, the people who run Monzo would disagree with you that they shouldn’t be concerned about making a profit. If they don’t they can’t stay in a business! (Wait a minute… unless you were saying you think Monzo’s c-suite are too incompetent to run a business successfully, and therefore nobody should invest in them?)
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The only reason people should be buying shares in any company is because they think they’ll make a profit!
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To be honest I find this a bit unclear too. The share price is supposed to reflect the value of the company as a whole (including debts, etc). If the price was £14 in 2021 and is still £14 in 2024 to me that implies that the company as a whole has the same value. It would be useful to get some resassurance from someone who understands all this better, that our shares haven’t simply been diluted. For example if I owned 0.00001% of the company in 2021, do I still own 0.00001% of the company now in 2024? Or has something happened to dilute that share? Hopefully it hasn’t, and I’m sure the people are Monzo are doing everything above board, but I do find it a bit unclear.
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Correct, it does.
They’ve been diluted (very heavily). This was always going to be the case, shares are diluted each funding round and we all knew Monzo would have further funding rounds when we bought the shares. Dilution is 100% above board - it’s expected!
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You’ve contradicted yourself a bit there. The share price remaining the same, the company value remaining the same and dilution occurring can’t all be true at once.
The company value has increased, there are now more shares at £14.
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Yes that’s true I guess, it’s a pre-money valuation, post money obviously the value has gone up. It would have been more accurate to say that pre-money the share price remained the same, the valuation remained the same and dilution was about to occur.
I see. I didn’t really understand that. My fault for not fully understanding how all this stuff works. So my next newbie question is, what is to stop the company continually diluting the shares as much as they want and effectively never sharing the increased value back to the original investors?
In theory could I start a company, sell £1000 of shares to person A, my company then becomes the next big thing and increases in value 10,000%, I issue thousands of new shares and so person A’s share is still worth only £1000, or maybe I issue millions of new shares and person A’s share is now only worth £10. Even though my company is the next Amazon. Is there anything to stop that?
Well, the directors who make these decisions are usually all major shareholders themselves. The VCs who hold most of these shares also have voting rights over these decisions.
There will also be a full charter of what can and can’t be done by the company regarding shares and dilution for each share type, but generally I’d just trust the company wants its share values to go up!
My understanding is that there shouldn’t be any more dilution as the latest funding round is their last
I think this is a complex topic, as there multiple types of stocks.
There are common stocks and preferred stocks (there have a higher priority). There should be dilution protection somewhere explaining what will happen if new stocks are issued, there’s also about voting rights, you can have stocks without any voting rights.
I’m not a lawyer but I’m sure there are multiple other types of things
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I see. And if they’re creating loads of new shares presumably they can’t just ‘allocate’ some of them to themselves, they would actually need to purchase all shares at the nominal value I suppose. Which I guess does mean they have an interest in protecting the value of the original shares.
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Ahhh, like the directors create 5 trillion new shares and then allocate those just to ‘themselves’, excluding any non-voting share types? Thus effectively making the pre-existing shares worthless. I can see what you mean now.
There may or may not be some protection against that in the shareholder agreement for Crowdcube shares, I’m not sure (larger investors would 100% be protected legally from this sort of thing).
It’s possible I guess that a rogue company might get startup investment then do this sort of thing - I’ve definitely also heard of companies who raise on Crowdcube, allegedly pay themselves huge salaries with the gains and then fold a few years later, so some sort of company owner diddling is probably describable as one of the risks of startup investment.
Clearly not the kind of thing a company like Monzo would be doing, and if they had done it there would a very clear public record of it. But in some way, sure when you invest you are placing your trust in the directors of the company you are investing in.
There’s easier ways of fiddling things to the same end than playing games with dilution, if a small group of shareholders are trying to take control.
For example, set up a new company, sell or transfer the valuable shit to the new company, and leave the old one with junk. Shareholders in new company quids in, those in old one shafted!
But this is why lawyers exist. They exist to draw up contracts and articles to prevent funny things happening, and they exist to litigate the cases where things do.
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