Monzo, a London-based challenger bank, is closing a funding round that will value the company at about $1.5 billion, which represents a 40% drop due to the impact of COVID-19, a source familiar with the talks confirmed. 

The funding, as reported by Financial Times, will provide Monzo up to $97 million, but would value the fintech well below the company's recent valuation of $2.4 billion from a June 2019 funding round. 

The round would be funded by existing investors in the company, which include Accel, Y Combinator Continuity, Goodwater Capital as well as U.K.-based Passion Capital. 

Mobile Payments Today reported earlier this month that fintech companies have been hit hard as investors have grown more cautious since the outbreak of COVID-19 created so much uncertainty in the global economy. 

Monzo, which is expanding into the U.S., was forced to cut hundreds of workers and the CEO Tom Blomfield recently announced plans to forego his salary.