Mondo, the online challenger bank, has raised £5m from Passion Capital. This will rise to £6m following a crowdfunding campaign.

Mondo has raised the funds at a £30m post money valuation. It follows Atom Bank (£75m raise pre launch) and Starling (£48m raise pre launch) in raising substantial funds before gaining a banking license.

The wave of recent funding rounds for online banks represents a fascinating progression in fintech of companies targeting the core of a bank's offering, rather than focusing on specific offerings that are underserved and/or overpriced by the incumbents (e.g. SME lending, FX). 

Challenger banks will continue to attract substantial funding rounds throughout 2016 as they jump through the hoops of regulation and target customers from the incumbents. With strong demand from both financial and strategic investors from both sides of the Atlantic, we expect online banks to be one of the key growth areas in European fintech over the next few years.