Digital bank Monzo’s valuation has soared to £4.5 billion after issuing additional shares to major investors, including Singapore’s sovereign wealth fund and StepStone Group.

The secondary market sale will allow for the challenger bank’s employees to sell their own shares in Monzo, netting what is expected to be tens of millions of pounds.

According to an unnamed insider at the bank who spoke to Sky News, the sale will set a new floor for Monzo’s valuation as it inches closer to an initial public offering.

The bank, which claims 20% of UK adults and 6% of businesses as its customers, already raised £340 million in March this year with a pre-money valuation of £3.6 billion, followed by an additional £150 million in May, boosting its post-money value to just over £4 billion as it prepares for international expansion.

Among its previous investors are Alphabet’s CapitalG, Google’s GV, Chinese group Tencent, HongShan Capital, and Passion Capital.

Founded in 2015, Monzo has become one of the UK’s top fintech companies, now serving over 10 million customers, making it the seventh-largest bank in the UK by customer numbers, with a workforce of more than 3,700 employees.

The firm has been consistently ahead of other digital banks such as Starling Bank and Revolut, however with the latter now holding a UK banking licence and a global value of $45 billion (£34.4 billion) speculation has begun that Monzo might soon face tougher competition.

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Monzo has big plans of its own, including further expansion into European markets and holds hope of cracking the US, however initially withdrew its application for a US banking licence in 2021 after being told by regulators it was unlikely to be approved.

With its new valuation, the neobank has bounced back impressively from a challenging period after the City watchdog launched an investigation into potential breaches of anti-money laundering and financial crime rules.

Since then, the company has shaken up its corporate structure, and created the Monzo Bank Holding Group in efforts to sidestep the tough capital requirements from UK regulators while it ventures into international markets.