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

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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