Mobile-only bank Monzo has hit its crowdfunding target after raising £18 million in less than three hours.
The mobile-only lender reached its £20 million goal after its more than one million current account customers were able to buy shares in Monzo, in the largest ever crowdfunding round for a British fintech (financial technology) company.
Monzo raised £18 million in two hours and 45 minutes, of which around £7 million was raised in just the first five minutes.
The company also raised £2 million from existing investors.
Monzo has raised the money to help with its expansion plans.
Around 36,000 of Monzo’s customers invested in the bank, with 2,457 returning investors.
Monzo, which launched in 2015, said in October that it raised £85 million from private investors.
As part of the crowdfunding scheme, Monzo’s customers were able to buy unlisted shares in the company for between £10 and £2,000 via its mobile phone app and crowdfunding website Crowdcube.
The method raised controversy earlier this week, following an article in The Times last week which said Monzo customers would be able to use overdrafts to buy shares in the company.
Chief executive Tom Blomfield hit back saying the company does not “encourage our customers to borrow money, from Monzo or anyone else, to buy shares”.
“The article seems to stem from the fact we offer overdrafts to our customers and aren’t withdrawing that facility while fundraising is live,” he said.
Monzo, like rival mobile-only lenders Starling and Atom Bank, is aiming to take market share from traditional high street banks.
The company is also one of Britain’s few “unicorn” companies – an unlisted technology company valued at more than 1 billion dollars.