Sources: Y Combinator’s growth fund to back challenger bank Monzo

Just 5 months after announcing £85 million in Series E funding, Monzo is already gearing up to raise additional funding, which would almost double its valuation.

As reported in the Sunday Times yesterday, the U.K. challenger bank is close to raising £100 million in further funding in a new round led by an unnamed U.S. investor. If the deal goes through, it will reportedly give Monzo a pre-money valuation of £2 billion, up from £1 billion in October.

Now TechCrunch has learned that the new U.S. backer is Y Combinator.

According to multiple sources within investor circles both sides of the pond, the Silicon Valley accelerator and venture capital fund plans to invest in Monzo out of its growth fund, the vehicle it typically uses to double down on fast-growing companies within its alumni.

Notably, Monzo isn’t a graduate of YC. However, Monzo co-founder Tom Blomfield’s previous startup, the payments company GoCardless, did go through the accelerator program, making Blomfield himself an alumni.

Monzo declined to comment. Y Combinator couldn’t be reached at the time of publication and I’ll update this post should I hear back.

Meanwhile, the news that Y Combinator is lining up to invest in Monzo makes a lot of sense in a number of ways beyond Blomfield’s previous ties to the accelerator. The challenger bank already boasts a plethora of U.S. investors, such as U.S. venture capital firm General Catalyst, Thrive Capital and Stripe.

And, as TechCrunch reported exclusively, Monzo has quietly begun working on a U.S. launch. This is includes setting up a small team states-side to begin laying the groundwork to bring a version of Monzo to North America, which will initially be powered by a U.S. banking partner while Monzo works on the necessary regulatory licenses to go it alone.

Monzo continues to grow at a clip here in the U.K., too. To date, the challenger bank claims more than 1.2 million customers since it launched in 2015.