UK challenger bank Monzo has raised $144m (£113m) in funding from Silicon Valley.

The round, led by popular US accelerator Y Combinator’s continuity fund, doubles its valuation since its last funding round to $2.5 billion.

The accelerator has previously been responsible for helping late-stage tech start-ups such as Airbnb and Dropbox in becoming household names.

Founded in early 2015 as ‘Mondo’ before changing its name, Monzo’s latest round of investment comes after the app-based bank announced its long rumoured plans to expand into the US.

The unicorn will use the funds for its transatlantic launch and new marketing, including a TV ad campaign designed to increase the diversity of its already 2 million UK customers.

The start-up has selected Los Angeles as its first US headquarters, with plans to expand further as it secures a foothold with in-person events.

Popular with millennials, the app-based bank can be opened from a smartphone and verified through a ‘selfie’ video before being posted a physical debit card.

Inside its app, Monzo offers intelligent money tracking and the ability to split bills, set budgets, and event set limits on gambling spend.

The start-up recently diversified its offering with new products, including a business account and ‘plus’ current account offering discounts and rewards.

“When it comes to consumer apps, banks are at least a decade behind the ease and feature-set of a Lyft or an Airbnb, not to mention sloth-like and unimaginative when compared to the innovation cycle in the apps we use every day,” Monzo’s CEO Tom Blomfield said in a statement.

“With Monzo, we aim to make money work for everyone by working with our community of users to build things that work for them.”

Despite its valuation, Monzo’s overall losses in the 12 months to February 2018 jumped to £33.1m, a fact which Blomfield has explained as the result of putting profitability behind customer value.