London fintech Monzo is preparing a bid to merge with its Nordic rival Lunar as it turbocharges its European expansion.
The mobile bank is holding discussions with Denmark-based Lunar over the terms of the deal, according to a report by Bloomberg. It is also considering other acquisitions in Europe.
Lunar, a digital bank with over 650,000 users across Denmark, Sweden and Norway, hit a valuation of $2.2 billion after a fresh funding round last year, while Monzo’s valuation reached $4.5 billion in 2021.
Monzo declined to comment.
The plans make Monzo the latest London fintech to be eyeing European expansion after The Bank of London today said it was hiring 300 staff and had formally applied to the EU for a banking license.
The bank said it would set up a base in Luxembourg as part of a 200 million euro (£170 million) investment that would see it build a workforce of 300 in the country over five years.
“By choosing Luxembourg as its EU headquarters, there is an exciting opportunity to offer Luxembourg and the broader EU market a new global digital clearing ecosystem for financial institutions and corporate commercial clients,” the bank said.
Bank of London founder Anthony Watson said: “Luxembourg is the logical choice for us to build out our offering across the EU, and marks the latest step in our international growth strategy and follows the successful rollout of our banking solutions across the UK.”
Liverpool Street-based Monzo has come under the spotlight in recent days after it emerged Chancellor Jeremy Hunt was denied an account with the bank last year because he was a “politically exposed person.”
Hunt said in an interview with the Financial Times: “If the price of going into public life is that you find it really hard to set up a bank account, then we need to make sure that we remove barriers where we can.”
“I think that’s why I was declined by Monzo for an account last year.”
In May, Monzo became the latest British digital bank to become profitable after seeing a spike in lending and more customers depositing cash.
The bank says it now has more than a 10th of the UK population as customers.
Known for its iconic ‘hot coral’ red debit cards, Monzo was founded in 2015 by tech entrepreneurs Tom Blomfield and Paul Rippon, who have a net worth of £157 million and £234 million respectively according to the Evening Standard Tech Rich list.
Rippon quit the company in 2020 to start an alpaca farm, while Blomfield stood down from the board in 2021.
