The Brazilian digital bank Nubank has shown interest in acquiring the U.K. FinTech Monzo. This potential acquisition could value Monzo at as much as £10 billion (roughly $13.2 billion), according to a report by the Financial Times on September 26, which cited two sources familiar with the situation.
Insiders mentioned that Monzo is considering three primary options. The first possibility involves a takeover that would include a mix of cash and shares, placing Monzo’s value between £8 billion and £10 billion. Another option is for Monzo to engage with private equity firms to sell up to a 15% stake in the company, aimed at raising capital for its growth. The third alternative would see Monzo pursue a “venture capital-style” funding round, allowing investors to acquire smaller shares in the business.
Monzo has been contacted for comment but has not responded as of yet. When approached by the Financial Times, Monzo declined to provide any remarks.
A Nubank spokesperson stated that the company does not comment on rumors or speculation, emphasizing their dedication to transparent and timely communication regarding significant business matters.
The Financial Times highlighted that these discussions come at a critical juncture for Monzo. Last year, several investors advocated for the dismissal of the company’s board chairman following the unexpected resignation of CEO TS Anil. Gary Hoffman, who has been serving as board chairman since 2019, recently announced his intention to step down.
New CEO Diana Layfield, who took over in February, has decided to cease Monzo’s operations in the U.S. The move is part of a strategy to focus more on the European market, where the company has launched services in Ireland and Spain.
Earlier this year, it was reported that Monzo’s exit from the U.S. came after the company reconsidered its pursuit of an American banking license. They had withdrawn their application in 2021 after regulators suggested that approval was unlikely and later thought about restarting that process as part of a broader expansion strategy.
A banking charter would have allowed Monzo to operate under a singular regulator, access core payment systems, and provide loans directly. Without this, they remain reliant on partner banks, which could limit profit margins and the range of products.
The Financial Times also noted that selling Monzo to Nubank, which has a valuation of $65 billion and serves 140 million customers across the Americas, would negatively impact the London Stock Exchange, which has been seeking a listing from Monzo.
Nubank is also concentrating on international growth, having recently secured a banking license in the U.S., as per the Financial Times report.
