Monzo, a fintech firm based in London, is set for a merger deal with its Nordic rival known as Lunar. The deal will allow the company to turbocharge its expansion into the European region. The discussions surrounding this possible deal are currently ongoing.
Monzo ready for merger with Lunar
Monzo and Lunar are currently holding talks over the terms of this deal, according to a Bloomberg report. The mobile bank is also reportedly exploring other acquisitions across Europe.
Lunar is a digital banking platform that has a notable presence in Europe. The platform boasts more than 650,000 users in Denmark, Norway, and Sweden. It held a funding round in 2022 that placed its valuation at $2.2 billion. On the other hand, the valuation of Monzo hit $4.5 billion in 2021.
The plans announced by the company have led to Monzo emerging as the latest fintech in London that is eyeing to have a solid presence in Europe. During its 2023 fiscal year, Monzo recorded a 2.3x growth in revenues and said that it had moved to profitability during the first two months of the current fiscal year.
UK Chancellor says Monzo denied him a bank account
The revelations about the merger deal come after the platform came under the spotlight after it was reported that Chancellor Jeremy Hunt was denied a chance to open an account with the bank in 2022 over his stance as a “politically exposed person.”
While speaking with the Financial Times, Hunt said that the price paid by those who wanted to go into public life was that they faced challenges setting up bank accounts. The Chancellor noted that it was important to eliminate the barriers where possible.
In May, Monzo emerged as the latest digital bank in Britain to move into profitability after recording an increase in lending activities and a rise in the number of customers that were depositing cash to the platform. The bank has now said that its presence across the UK has increased significantly, adding that over a 10th of the UK population were now customers at the bank.
UK fintechs eye expansion into Europe
Monzo is not the only UK fintech that is eyeing expansion into Europe. The Bank of London had earlier revealed plans to hire 300 staff, and it had also formally applied with the EU for a banking license.
The bank plans to set up a new location in Luxembourg as part of a 200 million euro investment that will allow it to set up a workforce of 300 within five years. With Luxembourg as the EU headquarters for the bank, it will allow it to provide the broader EU market with access to a global digital clearing platform that can be used by financial institutions and corporate commercial clients.
The founder of the Bank of London, Anthony Watson, noted that Luxembourg would allow the bank to expand its offerings across the EU while pursuing global growth while rolling out banking solutions in the country.